Why choose an Accredited Buyer’s Representative, ABR® to purchase your new home?
When you are looking to purchase your property, it is only in your best interest to contract an agent (Realtor®) to work exclusively for YOU. This contract is known as an Exclusive Buyer’s Agency agreement.
An Accredited Buyer’s Representative ABR® such as myself has taken several more courses to achieve this designation. As well, we must continue to update our education on an annual basis. I am skilled at listening to your needs, identifying areas to purchase, researching properties, providing immediate MLS information to you and perhaps most important, negotiating on your behalf.
Once you successfully negotiated an accepted offer on a property, it is my duty to explore every possible facet of this land and buildings and surrounding neighbourhood. This would include researching at respective City Hall, inspectors, previous MLS transactions, local area interests, potential risks and hazzards. For example, I have experience as a land developer, home owner, landlord, and recreational property owner. I have sub-divided land, substantially renovated and home and been a landlord and property manager for over 20 years. All of this combined experience lends me to have knowledge of building materials, land situate/site considerations, ecological effects and so on. May I point out for instance, that I could easily identify your roof style is an expensive roof style to replace vs. a standard 2 or 4 slope roof. It’s these years of continued learning as a full time Realtor and experience that provide my clients with favourable results.
I will earn my commission because I will help you achieve your goal by not only identifying and securing your dream property but also favourable terms and conditions at the best possible price. Buyer’s Agents’ commission are paid for by the Seller and offered at a set which is fully disclosed to you. A typical Buyer’s commission is 3.22% of the first $100K and 1.15% on balance.
I am an extremely dedicated professional full time Realtor. I am careful to plan a balanced lifestyle that affords me to achieve a high sales volume whilst managing a healthy family lifestyle. To that end, it is my core belief that I will only work for you if I can provide the very best in care and attention. I typically work with a maximum six buyers under contract and up to three listings at any given time. This amount of dedicated activity equals approximately 50 hour work week often evenings and weekends.
I am respected by my colleagues, my management and support staff team, suppliers/tradespersons and the like. My pleasant outgoing nature makes most people feel at ease, allowing me to obtain as much information and cooperation as possible from each resource. This is in fact a skill and my willingness to work extremely hard and “dig” for all the answers is why my clients continually recommend my services to their family and friends.
I look forward to working with you and helping you find your dream home!
What should I look for in a realtor?
You should seek a realtor that you communicate well with and will convey your wishes accurately. Further, this trusted person should be able to explain their fiduciary duties to you and why they are of the utmost of importance by:
* providing undivided loyalty and trust; and
* putting your interests first by never disclosing your personal information
How should I choose my realtor?
There are many ways to find a real estate licensee with a reputation for excellence. Word-of-mouth is a great. Ask friends, neighbours and fellow colleagues who have recently bought or sold a home to recommend their choice of a licensee. You might meet a licensee you like at an open house who is showing one of the properties for sale in your neighbourhood. Or, you could contact several local real estate brokerages to inquire if they have a licensee who specializes in selling homes similar to yours. Make appointments with licensees to discuss their range of services, background, knowledge, and fees or commission rates. After these interviews, choose the licensee whom you communicate best and is able to render the services & produce the results you are seeking without the “over promise”.
Sample Interview questions for a REALTOR®:
Are you a licensed REALTOR®?
REALTORS® are licensed real estate professionals who are also members of a local real estate board. A REALTOR® acts as an agent for the buyer or the seller — or, in less frequent situations, for both. But no matter who they represent, REALTORS® are legally obligated to protect and promote the interests of their clients. All REALTORS® must adhere to a strict Code of Ethics and a high standard of business practices.
Can you give me references from recent clients?
This could confirm or reject your opinion of the REALTOR®. Most people DO NOT contact the references – this step only takes a few minutes and should not be overlooked!
Have you been in tough negotiations?
Ask how they handled it. You want to make sure your REALTOR® is a strong negotiator.
What are your fees?
Usually the seller pays the commission, but it pays to check. If you are selling, ask what fees you’ll be charged and if there are any other costs. If you are buying, ask if there are any costs you’ll have to cover.
How will you find or sell a property for me?
What technology will your REALTOR® use to search for and to keep you informed?
How do you communicate with your clients?
Make sure you’re both using the same method – phone, email, other.
What is your List to Sell average ratio?
An experienced Realtor can tell you the number of listings they’ve sold this year and the average price compared to list. This result will identify someone who is not only a good negotiator but also provides realistic list pricing strategy.
Should I list my property or sell first?
Depending on the Market (Seller or Buyer) and how active it is at a current time depends upon whether you should list or sell first. As long as both transactions occur within a similar time frame there shouldn’t be a significant loss or gain to both property values.
Are realtor’s commissions negotiable
Yes, you and your REALTOR® will agree to a fee prior to your purchase or sale. There is no set fee or commission rate in the real estate profession. All fees or commission depends on the services your REALTOR® provides, which can vary significantly depending on your needs as a client or the business model used by the REALTOR®. Two common realtor business models are full service and discount or adhoc. Ensure you read all the fine print of the discount brokerage extra charges as you may end up paying for more than you bargained! Be mindful of the market and that nothing compares to experience and professionalism to assist you in obtaining your goal.
I’m not happy with my realtor – what can I do now?
Express in writing, your concerns directly to your realtor. If they do not take appropriate quick action to rectify or address your needs, contact the manager of the brokerage. If you still are not satisfied, contact the Real Estate Council and file a complaint.
How to I buy real estate?
For many, a mortgage is required. Visit a bank plus at least one mortgage broker prior to your search. Ensure you are comfortable with terms, repayment structure, taxes plus your living expenses. This is referred to as mortgage pre-qualification. The lender will require proof of income and a list of debt and assets.
Hire an experienced Realtor with Accredited Buyer’s Representative or ABR. These individuals have taken extra steps & further education to become ABR and have the skills and expertise to shorten your search and save you time and money.
Define the reasons why you want to purchase. Is it to stop paying rent, build equity, raise a family, move to a larger home?
Define specific needs and wants and create a wish list. Buying real estate is a process. Think of yourself as zeroing in on a target and move from general to specific for style of home, neighbourhoods, schools, length of commute etc.
With your goals in mind, watch the market closely and visit every property that fits your criteria. Once you are keenly aware of the sold prices, it’s time to make your offer!
How do I buy a new pre-sale condo?
Those fancy development show homes are definitely inviting! When you agree to buy a pre-sale unit, you’re actually entering into a contract for the right to receive and an obligation to pay for a finished condo at a set point in the future. There are several risks and rewards with buying presale:
|The real estate market could go down in the future while you paid today’s price.||Market goes up and you’ve only paid a small deposit.|
|Deposits are usually non-refundable.||Deposits total 20% or less and usually paid in small increments.|
|Customize design elements|
|Developer can decide not to proceed with development due to lack of sales.||If you are one of the original purchasers, you have selection, terms and possible items you can negotiate such as a decorator’s allowance.|
|Covered by 2-5-10 Year Home Warranty.|
|Lenders – may not cover the full mortgage amount required if the market softens significantly prior to completion||Lenders – if the mortgage rates do go up, you can usually arrange to work with the developer’s preferred lender to secure the best mortgage rate possible.|
Be sure to READ the Full Disclosure Statement and all subsequent amendments. Many developments market pre-sale homes 1.5+ years in advance of providing occupancy.
Enlist an experienced Realtor, mortgage broker and lawyer to help safely guide you through the process.
Real Estate Taxes – how much tax will I pay?
|Property Transfer Tax is calculated at 1% of the first $200,000 and 2% on balance. 3% is payable on amounts above $2 Million.
$500,000 purchase price =
$2,000 + 6,000 = $8,000 PTT
PTT may not be rolled into your mortgage and must come from your own closing costs.
First Time Homebuyer’s Exemptions may exist check: http://bit.ly/1PZmGfI BC Provincial Government website.
|If you live in your home and it is considered your principal residence, no capital gains tax is payable.|
Each municipality calculates their property taxes annually. The full amount payable will be adjusted on your statement of adjustments based on the Contract of Purchase and Sale.
|If you are an investor or the sale of real property is not your principal residence, 50% of your gain is taxable. The amount of your taxable gain and subsequent taxes due should be verified by an accountant as there may be off set expenses that you may not be aware.
Here is Revenue Canada’s explanation for calculating a capital gain: Revenue Canada
|GST & PST are calculated on the services and goods rendered by lawyer, inspectors, appraiser, or contractors.||GST is payable on all services including realtor’s commissions, legal fees and any contractors.|
Only applicable on sale of real estate if not your principal residence
|Payable on 50% of the net gain on a non-primary residence. The complexity of Revenue Canada’s taxation calculation require that you obtain professional advice from an accountant on Capital Gains. Capital Gains taxes will be due when you file your income taxes for the year in which the property was sold. A savvy investor will likely sell their investment property at the beginning of the year as taxes will not be due /payable until April 30th the following year.|
How do I estimate closing costs?
|Costs to Buyer||Seller Costs|
|Property Transfer Tax (see above)
Property Taxes adjusted #days for gross taxes
Legal fees and Disbursements to convey property
Utilities, water, waste, sewer
Any adjustments on strata fees, move in fees
Appraisal and mortgage costs
Title Insurance or survey certificate
|Clear title of all non-financial encumbrances such as mortgages or any outstanding dues, taxes or liens.
Mortgage penalties may apply if you are dissolving a mortgage completely. Check with your mortgage provider to ensure you know the amount as it can be extensive if the term left on the mortgage is over 1 year.
Real estate commissions & applicable taxes
What is a Sellers Market in Greater Vancouver?
A measurement closely watched by the real estate industry, known as the sales-to-active-listings ratio, determines the market conditions. B.C. real estate agents consider it a balanced market when the ratio ranges from 15 per cent to 20 per cent. It is deemed a buyer’s market below 15 per cent and a seller’s market above 20 per cent in the Vancouver area.
Look to market segment within each sub-area such as North Vancouver Central Lonsdale in both resale and new for detached, townhome and condominium sales as there can be a seller’s market for one category and buyers market in another.
What is a Buyer’s Market in Greater Vancouver?
A measurement closely watched by the real estate industry, known as the sales-to-active-listings ratio, determines the market conditions. B.C. real estate agents consider it a balanced market when the ratio ranges from 15 per cent to 20 per cent. It is deemed a buyer’s market below 15 per cent in the Vancouver area.
Look to market segment within each sub-area such as North Vancouver Central Lonsdale in both resale and new for detached, townhome and condominium sales as there can be a seller’s market for one category and buyers market in another.
What do all the real estate stats mean?
Home Price Index taken from our MLS® is an alternative measure of real estate prices that provides a clearer picture of market trends over traditional tools such as mean or median average prices.
A mean average is the average price obtained by dividing the total dollar volume of sales by the number of sales.
To get a median price, all of the sales prices are arrayed in numeric order. In the case of an even number of sales, the median is the highest price in the lower half of the group. If there is an odd number of sales, the midpoint sale is taken as the median.
The MLS® HPI concept is modelled after the Consumer Price Index, which measures the rate of price change for a basket of goods and services. A basket is the combination of goods and services that Canadians buy most such as food, clothing, transportation, etc.
The sales-to-active-listings ratio tells us whether we are in a buyer, seller or balanced market.
North Vancouver, which neighbourhood is best for you?
LOCATION and VIEWS determine the best outcome for increased profit for real estate in North Vancouver. Depending on your budget and needs find the right type of home whether detached single family house, townhome, 1/2 duplex or condo. Below is a list of neighbourhoods and the approximate housing mix.
|Sub Area||Housing Mix|
|Blueridge||Mostly single family homes, 1% townhome, .5% condo|
|Boulevard||Mostly single family homes|
|Braemar||Mostly single family homes|
|Calverhall||Mostly single family homes|
|Canyon Heights||Mostly single family homes, 1% townhome, 1% cono|
|Capilano||Mostly single family homes, 10% townhome, 10% condo|
|Central Lonsdale||70% condo, 8% single family homes, 12% townhome, 15% half duplex|
|Deep Cove||Mostly single family homes, 2% townhome, 2% condo|
|Delbrook||Mostly single family homes, 2% condo, 2% townhome|
|Dollarton||Mostly single family homes, 1% condo|
|Edgemont||85% single family homes, 10% condo, 5% townhome|
|Forest Hills||Mostly single family homes|
|Grousewoods||Mostly single family homes, 1% condo, 2% townhome|
|Hamilton / Heights||Mostly single family homes, 2% condo, 2% townhome .5% ½ duplex|
|Indian Arm/River||Mostly single family homes, 10% townhome, 2% condo|
|Lower Lonsdale||Mostly condo, 15% townhome, 5% half duplex, 2% single family home|
|Lynn Valley||Mostly single family homes, 10% townhome, 5% condo|
|Lynnmour||Mostly townhome, 10% single family homes, 5% condo|
|Norgate||Mostly single family homes|
|Northlands||Mostly single family homes, 5% townhome, 2% condo|
|Pemberton / Heights||Mostly single family homes, 5% condo, 2% townhome|
|Princess Park||Mostly single family homes|
|Queensbury||Mostly single family homes, 10% ½ duplex|
|Roche Point||Mostly condo, 20% townhome, 10% single family homes|
|Seymour||Mostly single family homes, 8% townhome, 2% condo|
|Tempe||All single family homes|
|Upper Delbrook||Mostly single family homes, 2% condo|
|Upper Lonsdale||Mostly single family homes, 10% condo, 5% townhome|
|Westlynn||Mostly single family homes, 5% townhome|
|Windsor Park||Mostly single family homes|
|Woodlands Sunshine||Mostly single family homes|
What are the best schools in North Vancouver?
Schools and their catchment are important. Many purchasers have young or pre-school aged children when considering their first home purchase, yet highly consider the catchment districts in their purchasing decision. In North Vancouver, School District 44 we look to the Secondary Schools and their subsequent feeder schools or elementary when considering catchment. Competition and demand for flexibility in all categories of academics, sport, diversified learning opportunities and the arts have increased the profiles of each Secondary School. Our Secondary Schools in North Vancouver are: Argyle, Carson Graham, Handsworth, Seycove, Sutherland and Windsor. You will find a useful interactive map search under “Listings”.
Private schools in British Columbia receive provincial funding for each student if the BC curriculum is followed. Private schools in North Vancouver:
What areas of North Vancouver should I consider to live in?
Lolo, Edgemont Village, Lynn Valley – any of these ring a bell? Did you know that two municipalities use the name North Vancouver. They are the City of North Vancouver with approximately 48,000 residents, and the District of North Vancouver with more than 84,000 residents. The City and District are separate entities with their own mayor, council and operations departments. They share several core services, including the North Vancouver Recreation Commission, the North Vancouver School District, and the North Vancouver detachment of the Royal Canadian Mounted Police. These two municipalities and the District of West Vancouver are referred to as the North Shore.
The differences between both municipalities are readily apparent to their residents. Most Metro Vancouver residents do not distinguish between them and refer to both as North Vancouver. The same is true for commercial advertising and many government departments, including Canada Post. There have been several proposals of merging the two municipalities, but none have progressed beyond the concept stage.
There are physical and social differences between the two municipalities. The District of North Vancouver is the larger of the two, and is bounded by the Capilano River to the west, Indian Arm to the east, Burrard Inlet to the south, and the North Shore Mountains to the north. It sprawls in an east-west direction across the mountain slopes, and is known for its frequent rain, rugged terrain, and steep and winding roadways. The District primarily consists of single-family residential housing and has an industrial base along the shoreline of Burrard Inlet. It has a lower population density and no clearly defined downtown.
The City of North Vancouver has an urban feel and is surrounded to the east, north, and west by the District. It has the majority of the North Shore’s waterfront commercial operations, high-rise buildings, and rental properties. The City, along with the District, has industrial sites along the shoreline that are being converted to residential and commercial areas. It also has the Lonsdale Quay Market and the northern terminal for the SeaBus transit ferry to Vancouver. The City’s Central and Lower Lonsdale neighbourhoods are known as the “downtown” of the North Shore.
What is a property tax assessment?
British Columbia’s Assessment Act requires that every property owner receive a property assessment notice reflecting market values effective July 1 of the preceding year. Market value is the price an unencumbered property would sell for if a reasonable amount of time is allowed to find a purchaser.
Private and public appraisers use a number of generally accepted valuation approaches to develop market value estimates – direct comparison, cost and income. Each approach analyzes a property’s highest and best use – the most probable use of a property that would return the highest value, considering legal, economic, and social factors.
Your assessment does not necessarily mean market value as the valuation is completed July 1st and your notice is received January 1st the following year.
When do I pay property taxes in North Vancouver?
Property taxes are due in full on the first business day after July 1st. You may choose to prepay your taxes on a monthly and pay directly to the municipality or roll the monthly tax amount in to your mortgage and your lender will pay the taxes annually. Either of these options are beneficial for budgeting purposes. Taxes not paid on the due date will be assessed a 5% penalty and added to your tax account.
At the time of July first business day you are actually paying 50% from the previous 6 (Jan – June) months and 50% toward the end of the year (July – December).
Each property is assessed as at July 1st with Tax Assessment Notices being delivered January 1st the following year.
What Is a Home Owner Grant?
The Home Owner Grant is a provincial government program designed to help home owners reduce their property taxes for the home in which they reside. The current Home Owner Grant is $570. If you are aged 65+ you may be eligible for a further grant of up to $850.
Most grants must be applied for each year either in person at City Hall or online with either the District or City of North Vancouver.
What is the first time homebuyers exemption for Property Transfer Tax?
The Province of BC implemented a “Luxury Tax” in 1997 on all properties over the value of $475,000. The tax is able to be “rolled into” your mortgage and must be paid as part of your closing costs.
A first time homebuyer that has never bought property anywhere in the world may qualify for an exemption of Property Transfer Tax calculated at 1% of the first $200,000 and 2% on the balance. The savings can be significant, for example:
|Property Transfer Tax Calculation|
|Purchase Price||$ 475,000|
|1% first $200,000 & 2% on balance||$ 7,500|
To ensure you meet all the criteria, including being a resident of BC for the last 12 months go to:
What is the best time of year to buy real estate?
In North Vancouver we no longer have a cyclical or typical market where the best time to sell or buy would occur. There are some “trends” but due to the demand outstripping supply for almost every year since 2000, there are no true definitive answers, however public perception is Spring which begins in early February.
Historically Spring was the best market for Sellers and Buyers and was considered the most active period from late February to June. Now we see real estate trading at multiple offers 365 days per year depending on supply and demand.
It’s best to consult your Realtor to understand the current market conditions. Below is a graph outlining inventory for 3 consecutive years. Notice inventory drops in December? Sometimes this is a fantastic month for sellers as demand continues and there is less supply.
If your purchasing your first property, begin your due diligence now. If you will be selling a property and purchasing a new one, ensure that you understand the dynamics and selling/buying market for both properties and determine how you can put yourself in the best negotiating position.
I want to buy a house or move from my condo to a house – – how can I trade up?
You have to achieve either of 2 things prior to trading up: gained equity in your condo due to length of time owned and/or market increase/value added or acquired funds for additional downpayment monies. In order to buy a home over $1M, the Federal Government requires a minimum 20% downpayment.
Don’t panic if the money $$$ hasn’t fallen from the sky! There’s a lot you can do as a condominium home owner to gain equity. Consider utilizing all of your space. Do you have an extra bedroom? You could rent this space out and put all the funds received directly paying down your mortgage. Have an extra parking spot? Other sources of revenue might come from renting your home while you’re on vacation. Consult your financial planner, set your financial goals, budget monthly and stick to it! Try being creative with less. Recycle upcycle whenever possible. Remember change is only possible when you try something different!
Should I buy an older larger older condo or townhome or brand new?
Yes! Both have benefits. Typically older homes are larger in size which can be a blessing for young families. Newer homes are designed for maximum space utilization and are more energy efficient. Older could have potential deferred maintenance issues and lack of funding. Newer homes are covered under new home warranty program (2-5-10). Older homes may have a lower purchase price and newer homes have the added responsibility of GST. Buy in the best location closest to the needs you have now and for the next 5 years.
What is my home worth?
The value of your home is determined by what a buyer is willing to pay. Properties that are similar in type, age, size, similar market time frame and location are measured against the subject property to determine estimated value. An appraisal will outline 3 or more properties and make adjustments based on upgrades and situate and time frame.
A Comparative Market Analysis completed by your Realtor will also help you properly price your property in order to achieve the highest effective sales price. There are pockets for price ranges that attract more purchasers. These pockets of prices can possibly attract multiple offers are typically the entry level of single family homes, mid range townhomes and luxury condos. Again, your realtors advice to pricing is paramount.
Which renovation project gets the best return on investment?
Believe it or not…. some homes are just not worth renovating. The value in North Vancouver is in the land and simply painting or adding a few new fixtures may not bring you a higher yield. There is no formula that spend X dollar amount on a kitchen, bathroom or deck and you’ll achieve Y in sale price. If you are adding spaces such as extra bedrooms or bathrooms or living areas, a renovation can produce a successful return. Be careful, obtain permits and hire professional contractors who regularly work in the area.
Example: 123 Smart Street does no renovation to a 1970s home. Owner purchased in 2005 for $800,000. Sale price as at Jan 1st 2016 would be approximately $1,300,000 or a gain of $500,000. 8910 Fancy Street buys similar 1970s home, same price/date and renovates to a nice standard (without any addition except enclosed garage), spends $175,000 on renovations and the home sells for $1,400,000. The winner is 123 Smart Street with a net profit of $500K whereas 8910’s net profit is only $425K.
Condos/Townhomes are different in that the value in the land is shared in common with all owners of the same strata. In this instance it would be best to upkeep your home to the highest standard possible. If you have an older strata, consider retaining a consultant to design the best use of the entire space – effectively bringing to newer design. The planning & design stage is where you can make many smart choices that will bring you the best return.
A buyer can finance your completed renovations and pay accordingly via mortgage. They cannot always purchase a property and then renovate as their funding has already been allocated to the purchase price. Ensure you obtain strata approval prior to renovating as some strata bylaws are strictly enforced. The risk is that you may be asked to remove all upgrades, obtain proper permits and lose money and time.
What are capital gains taxes?
If you own a secondary residence that you do not live in and decide to sell, the government will want their share of taxes calculated at 50% of the net gain against your current tax rate. It is best to seek professional advice from an accountant to fully understand your tax obligation.
Real Estate and Aging Parents
As the Baby Boom of Canada’s population ages, we find the largest transfer of wealth about to occur. Your parents have likely gained more than 1000% percent of the original home purchase – all tax free. Options you have to avoid taxes are:
Sell your home and rent back from the kids
Create a Trust
Change ownership or add a family member or loved one
Create a Life Estate opportunity
The importance of having a legal living will could save your family from having to make difficult decisions while facing stress or grief.
Should I use a lawyer or a notary for my real estate purchase?
Lawyers can provide legal advice, notaries can explain each document. Both provide professional assistance. Typically there is not a large discrepancy if fee for services. If you find yourself requiring legal assistance during a real estate transaction, often no extra charges are incurred for legal advice when using a lawyer.
What is Bank of Mom and Dad?
Since 2010 the phenomena of Bank of Mom and Dad has become prevalent to help adult children with downpayment monies to effect a real estate purchase. Parents either have funds available or take a loan on line of credit. With the interest rates at all time low, the average “gift” of $50,000 from a parent costs approximately $200 per month in interest only charges. The hope/trust factor is that once more equity is gained from the purchase, the adult children will repay the Bank of Mom and Dad.
Can I buy with no money down?
The Federal Government has strict rules for mortgage lenders that disqualify purchasers from buying with no money down or cash back incentives. If your downpayment is 5% or less, be very careful and obtain the maximum amount of insurance possible, including disability insurance. Should you have an injury or job loss and not be able to sell your property, you could be facing financial ruin. It’s best to have minimum 10% downpayment for real estate transactions.
GLOSSARY OF TERMS / REAL ESTATE DEFINITIONS
|Adjacent||In law, implies that two or more properties are not widely separated, though they may not physically touch.|
|Adjustment date||Date agreed to by both parties to a real property transaction for the adjustment of property taxes, rent, interest and other items.|
|Affidavit||A written statement of facts, the contents of which are sworn under oath to be true by the person making the statement. An affidavit is sometimes used in court proceedings as evidence in place of oral testimony|
|Agent||Has two meanings as follows: (i) as defined by the Real Estate Act, an agent is a person who has met specified licensing qualification and who acts on behalf of another in a real estate transaction with the expectation of payment for services rendered. An agent, as defined by the Act, may employ a salesman to do virtually everything referred to in the definition of agent. (ii) at common law an agent is any person who contracts to act for or on behalf of another, who in turn, is known as the principal. The common law principles of agency apply to both an agent and a salesman, as defined by the Act, when they are acting on behalf of a vendor or purchaser.|
|AGM||Annual General Meeting. All strata owned properties are required to hold an AGM every year.|
|Airspace||Historically, one owned the airspace above his land “to the heavens”. Today airspace refers to the legal concept that a person who owns land also owns as much of the airspace above his land as he can effectively use|
|ALR – AGRICULTURAL LAND RESERVE||A provincial zone in which agriculture is recognized as the priority use, farming is encouraged and non-agricultural uses are controlled.|
|Amortization||The process of paying off a loan by periodic payments of blended principal and interest.|
|Appraisal||The expert estimation of the value of a legal interest in land. Often used by lenders to determine acceptable mortgage risk.|
|Appreciation||The amount by which real property (or any other Asset) has increased in value.|
|Arm’s length transaction||Transaction in which the parties involved are not inclined toward making voluntary concessions to each other.|
|Assessment||The value of a property, set by the local municipality, for the purposes of calculating property tax.|
|Asset||Item of value owned by a business. Contrast to Liability.|
|Assumable Mortgage||A Mortgage that allows a purchaser to assume to take over the responsibilities and liabilities under the mortgage from the vendor.|
|Balance due on Completion||The amount of money the purchaser will be required to pay to the vendor to complete the purchase, after all adjustments have been made.|
|Balance Sheet||A financial statement listing Assets, Liabilities, and Owner’s Equity at a specific point in time. Also known as a Statement of Financial Position or Statement of Assets and Liabilities.|
|Balanced Market||A market in which the sales to active listings ratio is in a range of 14 to 20 per cent. In general, a balanced market results in home prices remaining relatively stable.|
|Bank of Canada Overnight Target Rate||The target level interest rate set by the Bank of Canada at which major financial institutions borrow and lend one-day (or “overnight”) funds among themselves.|
|Benchmark Property or Home Price||A property or home price against which other properties can be evaluated|
|Blanket Mortgage||A single mortgage registered against two or more individual parcels of real property.|
|Borrower Qualification||The process of determining the maximum amount that can be lent to a potential borrower, given his or her income and the Lending Value of the property to be purchased.|
|Breach of Contract||Failure, without legal excuse, to perform any promise which forms the whole or part of a contract.|
|Brokerage Fee||A fee charged by a mortgage broker for arranging a loan.|
|Builders’ Lien||A claim registered against the title to land by a contractor, supplier of materials or workman with respect to work done or materials supplied to improve that land.|
|Building Scheme||Refers to a scheme of development which comes into existence where defined land is laid out in parcels and intended to be sold to different purchasers or leased or subleased to different tenants each of whom enters into a restrictive covenant with the common vendor or landlord agreeing that his particular parcel should be subject to certain restrictions as to use.|
|Buyer’s Market||When there is a higher number of homes to choose from than buyers in comparison. Prices of homes tend to be lower and they remain available for sale longer. Buyers usually have more leverage in negotiating a purchase.|
|CAP RATE||The ratio between the net operating income produced by an asset and its capital cost (the original price paid to buy the asset) or alternatively its current market value.|
|CERTIFICATE OF PENDING LITIGATION||A notice of a pending court action lis pendens registered against the title to property for the purpose of warning all persons that the title to the property is in litigation and preventing dealings with respect to the property.|
|Closing Costs||Expenses in addition to the purchase price for buying and selling a property. Every transaction will differ – the following must be considered: CMHC, Property Transfer Tax, Inspector & other professional or contractor opinions, Appraiser, Fire Insurance, Legal, Real Estate Commissions, GST, Moving Expenses, utilities/connections, Survey or Title Insurance,|
|CLOSING STATEMENT||A statement prepared for a Buyer or Seller, showing the amounts to be received and paid out. The difference between these amounts represents either the balance payable (by the buyer) or the cash proceeds from sale (to the seller) upon completion of the transaction. See also Purchaser’s Statement of Adjustment or Cash Settlement and Vendor’s Statement of Adjustment or Cash Settlement.|
|CLOSED MORTGAGE||A mortgage which cannot be fully paid out before expiry of its term.|
|common property||That part of the land and buildings shown on a strata plan that is not part of a strata lot. Each strata lot includes ownership of a fractional share of the common property within the strata property, proportional to the ratio of the area of that strata lot to the total area of all strata lots.|
|COMPLETION DATE||Date on which the purchaser’s solicitor undertakes to the vendor (or his solicitor) that he will pay the balance owing to the vendor upon the Transfer of Title being accepted for registration.|
|CONDOMINIUM||Shared ownership in property. Owners have title (ownership) to individual units and a proportionate share in the common elements.|
|CONSIDERATION||The legal term for the reason which induces a party to enter into a contract. Consideration may be in the form of a right, interest, profit or benefit accruing to one party. It may also be in the form of an agreement not to do something, or loss suffered by the other.|
|CONTRACT||An agreement between two or more persons which creates an obligation to do or not to do a particular thing.|
|CONTRACT OF PURCHASE AND SALE||A contract of purchase or sale of land which contains the obligations of the vendor and purchaser with respect to the purchase and sale. You may also find that this type of contract is referred to as an Interim Agreement.|
|CONVENTIONAL MORTGAGE||A mortgage loan that does not exceed 80 per cent of the lending value of the property.|
|Conveyance||A transfer of an estate or interest in land (other than by will) to a new owner through sale, lease, or other means. A transfer of title is the conveyance of an estate or interest in land in exchange for some financial consideration, typically a sale.|
|CORPORATION||A business entity which is owned by shareholders who decide on the general policies of the company through their elected Board of Directors. A corporation is a separate legal entity and therefore has the rights and liabilities of an individual. Shareholders do not share directly in the income of a corporation, but they may receive dividends.|
|COUNTEROFFER||One party’s written response to the other party’s offer during negotiation of a real estate purchase between buyer and seller.|
|COVENANT||A promise contained within an agreement. The person making the covenant is called the covenantor and the person in whose favour it is made is called the covenantee.|
|crown land||Land owned and administered by a government, either federal or provincial. In British Columbia, Federal (Canadian) Crown land includes National Parks, Indian Reserves, federal ports and military bases. Provincial Crown land includes provincial parks and all ungranted land (wilderness) within the provincial boundaries. Most of British Columbia is Crown land.|
|DEBT SERVICE RATION||The percentage of a borrower’s gross income that can be used for housing costs, including mortgage payment and taxes (and condominium fees, when applicable).|
|DEFECT||Defect means breach, broken or not working. Can be ANYTHING. Workmanship can only be challenged before the deficiency walk through on new home product. 3 step management system for DEFECT (breach, broken, not working):
First, write a letter to the Builder and have basic descriptions of what the problem is and a photo/picture that is DATED. Do not call – must be in writing.
Second, If there is a disagreement, write to the Home Warranty Program (i.e. Traveller’s, Aviva etc.), explain the situation and ensure you have a copy of letter to Builder included. Lastly, Arbitration process through HPO.
|DEPOSIT||An amount deposited with the agent by the purchaser when an offer to purchase is made.|
|DEPRECIATION REPORT||A depreciation report is now a planning requirement for strata corporations in British Columbia. Depreciation reports are used to establish long term planning for common property and common assets to determine:
· What assets you own (an inventory)
· The asset condition (evaluation)
· When things need to be replaced (the anticipated maintenance, repair and replacement)
· How much money you currently have (contingency reserve report)
· What it is likely to cost for future replacement (a description of the factors and assumptions in projecting costs)
· How you are going to pay for the costs (three cash flow models projecting 30 year replacement periods)
The depreciation report must be updated every 3 years by a qualified engineer.
|DOWN PAYMENT||The part of the purchase price of a property that the buyer pays in cash and does not finance with a mortgage.|
|Easement||A limited right attached to land (the dominant tenement) for the benefit of the owner of dominant tenement to use land of the owner of servient tenement. An example of an easement would be a driveway crossing one owner’s land (the servient tenement) to provide access to another owner’s land (the dominant tenement).|
|ENCROACHMENT||A fixture, such as a wall or fence, which illegally intrudes into or invades on public or private property, diminishing the size and value of the invaded property.|
|ENCUMBRANCE||A judgement, mortgage or lien or any other claim which is registered against the title to land.|
|EQUITY (in Mortgage Finance)||The difference between the price for which a property can be sold and the mortgage(s) on the property.|
|FORM B||The strata corporation is responsible for providing the Form B. However, under the Strata Property Act, the strata council carries out the duties of the strata corporation.
It is often the strata property manager who has the information necessary to complete the form. However, the strata council is responsible for directing the strata property manager. The information disclosed in the Form B is binding on the strata corporation and the requestor.
Information Disclosed on a Form B:
· any amount that the owner owes the strata corporation (other than an amount paid into court or to the strata corporation in trust)
· any agreements by which the owner takes responsibility for expenses relating to alterations to a strata lot, the common property or the common assets
· any amount that the owner is obligated to pay in the future for a special levy that has already been approved and the date by which the payment is to be made
· any amount by which the expenses of the strata corporation for the current fiscal year are expected to exceed the expenses budgeted for the fiscal year;
· the amount in the contingency reserve fund (CRF) minus any expenditures that have already been approved but not yet taken from the fund
· any amendments to the bylaws that are not yet filed in the Land Title Office;
· any resolution passed by a 3/4 vote or a unanimous vote that is required to be filed in the Land Title Office but that has not yet been filed in that office
· any notice that has been given for a resolution that has not been voted on, if the resolution requires a 3/4 vote or unanimous vote or deals with an amendment to the bylaws
· any court proceeding or arbitration in which the strata corporation is a party and any judgments or orders against the strata corporation
· any notices or work orders received by the strata corporation that remain outstanding for the strata lot, the common property or the common assets
· the number of strata lots in the strata plan that are rented
· any details about any parking stalls and storage lockers allocated to the strata lot and their numbers
· any other information required by the regulations
Documents to be Attached to the Form B:
· The rules of the strata corporation
· the current budget of the strata corporation
· the “Form J: the Rental Disclosure Statement” if one was filed for the strata lot
· the most recent depreciation report, if any
· the following may be required:
|FINANCIAL STATEMENTS||The financial statement must start from the beginning of the fiscal year and cover a period not less than up to two months before the AGM (annual general meeting). Within eight weeks after the strata corporation fiscal year end, the strata corporation must prepare a financial statement updated to the end of the fiscal year.
The financial statement must contain the following information:
· the opening and current balance in the operating fund
· the opening and current balance in the contingency reserve fund
· the details of the strata corporation’s income from all sources, except special levies. It is important to include income from such things as interest, fines, even guest room revenue
· the details of expenditures from the operating fund, including any unapproved expenditures
· the details of expenditures from the contingency reserve fund, including any unapproved expenditures
· income and expenditures by special levy, if any
The strata corporation must file a tax return for each fiscal year with the Canada Revenue Agency, and must provide a copy of their annual financial statements with their tax returns.
|FIXTURE||A chattel attached to real property; anything which has become so attached to the land as to form, in law, part of the land.|
|FORECLOSURE||A legal action taken by a mortgagee to obtain possession of a property, by reason of the mortgagor’s default in payment of the principal and/or interest of the mortgage debt.|
|GROSS DEBT SERVICE RATIO||A general rule that your housing costs (mortgage payments, taxes, heating costs, and 50 per cent of condominium fees, if applicable) should not be more than 32 per cent of your gross monthly income.|
|GROSS INCOME||The amount earned through employment or investment before taking taxes or other deductions into consideration. This amount may or may not be the same as gross income for purposes of mortgage lending.|
|GROW OP||A marijuana-growing operation, usually located in a house.|
|HIGHEST AND BEST USE||That use of land which, within all constraints (for example, zoning bylaws), will provide the maximum net return during the foreseeable future.|
|HOLD-BACK||A legal representative acting for a purchaser may hold back money from the seller on a real estate transaction. There seems to be a misunderstanding among some people that lawyers can impose holdbacks on the seller when the buyer requests one. Actually, holdbacks can only be put in place if both sides agree to it. If not, a lawyer has no ability to impose one. There are a few different types of holdbacks:
Pending Special Levy or another potential future financial obligation to a strata corporation, Builder’s Lien and, incomplete work.
|HOUSING STARTS||The number of privately owned new houses (technically housing units) on which construction has been started in a given period.|
|HPO||Homeowner Protection Office. A branch of BC Housing responsible for The HPO is responsible for licensing residential builders and building envelope renovators province-wide, administering owner builder authorizations, and carrying out research and education which benefits the residential construction industry and consumers.|
|INTEREST IN LAND||The most general term used to indicate a right, title or estate in land ranging from fee simple to lesser rights or estates such as leases, easements, mortgages or liens.|
|JOINT TENANCY||Where two or more persons acquire an equal undivided interest in a property. When one person dies, that person’s share automatically goes to the survivor or survivors.|
|LATENT DEFECT||A hidden or concealed defect that would not be discovered during the course of a reasonable inspection.|
|LEGAL DESCRIPTION||A description in words and numbers that specifies a parcel of land in terms that may include a lot or parcel number, root description and a survey plan reference. The legal description is created when the parcel is registered in the Land Title Register or Crown Land Registry and is sufficient for all purposes where a description of land is required in BC.|
|LEVERAGE||Controlling a large asset with a relatively small amount of cash. In real estate, $20,000 down payment (or less) can be used to purchase (control) a $100,000 home, for example.|
|LIEN||An interest in land claimed to secure the payment of a debt or the performance of some other obligation. Examples include Claim of Builders Lien for payment of debt related to labour or materials, Certificate of Lien for payment of strata fees, or Tax Act Liens for payment of various taxes.|
|LIFE ESTATE||An interest in land to be enjoyed during a person’s life, and which ends on that person’s death.|
|LISTING PRICE||The value at which a property is advertised for sale.|
|MEDIAN OR AVERAGE HOME PRICE||The average price of a home calculated by adding all sold prices and dividing by the number of homes sold.|
|MORTGAGE||An interest in land granted by the registered owner (the mortgagor) to a lender (the mortgagee) as security for a debt.|
|MORTGAGE BROKER||A person or company having contacts with financial institutions or individuals wishing to invest in mortgages.|
|MORTGAGE INSURANCE||Government-backed or privately-backed insurance protecting the lender against the borrower’s default on high-ratio (and other types of) mortgages.|
|MORTGAGE INSURER||In Canada, high-ratio mortgages (those representing greater than 80 per cent of the property value) must be insured against default by either Canada Mortgage and Housing Corporation (CMHC) or private insurers. The borrower must arrange and pay for the insurance, which protects the lender against default.|
|MORTGAGE PREPAYMENT PENALTY||A fee paid by a borrower to the lender in exchange for being permitted to break a contract (a mortgage agreement); usually three months’ interest, but it can be a higher or it can be the equivalent of the loss of interest to the lender.|
|MULTIPLE LISTING SERVICE® (MLS®)||A co-operative selling system for relaying information to REALTORS® about properties for sale.|
|NEW HOME WARRANTY Insurance||Homes built by Licensed Residential Builders are covered by mandatory, third-party home warranty insurance. As a minimum, this coverage includes 2 years on labour and materials (some limits apply), 5 years on the building envelope and 10 years on structure.|
|OFFER||A proposal to do or refrain from doing some specified thing usually followed by an expected acceptance, counter-offer, return promise or act. The person who makes the offer is called the offeror. The recipient of the offer is called the offeree.|
|PARCEL IDENTIFIER NUMBER (PID)||A nine-digit number randomly generated by the LTSA that uniquely identifies a parcel in the land title register of BC. The registrar assigns PID numbers to parcels for which a title is being entered in the computer register as a registered title. The Land Title Act refers to the PID as “the permanent parcel identifier”.|
|PRIME RATE||The lowest rate of interest at which money may be borrowed commercially.|
|PRINCIPAL||The mortgage amount initially borrowed, or the portion still owing on the mortgage. Interest is calculated on the principal amount.|
|property disclosure statement||The seller prepares the three-page document which can be legally incorporated into the Contract for Purchase and Sale.
The PDS itemizes potential problems such as asbestos insulation, unauthorized rental suites, renovations done without a permit and unregistered easements or encroachments, and includes a wide range of questions and can be relied upon by a purchaser during their due diligence process.
|PROPERTY TRANSFER TAX (PTT)||A land registration tax that must be paid when an application for a taxable transaction is made at any Land Title Office in BC to register changes to a certificate of title.|
|RAIN SCREEN TECHNOLOGY||A rain screen is a protective barrier of drainage channels installed between the interior and exterior wall surfaces, allowing the building to shed water. The rain screen acts both as a moisture break and an air space, preventing water from becoming trapped inside the walls, and making sure the frame dries completely after the water drains off.
Although umbrella architecture keeps most water off the building envelope, incidental moisture may sometimes get into the building envelope, for example, during a heavy wind-driven rainstorm. That’s where the rain screen plays a vital role in protecting the building envelope. Reviewing a building’s depreciation report will enable you to understand the drainage system including rain screening.
|REAL ESTATE SERVICES ACT||The BC statute that imposes licensing requirements on persons who provide trading services related to real estate, rental management services and strata management services.|
|REALTOR®||A real estate professional who is a member of a local real estate board and the Canadian Real Estate Association (CREA). Only these professionals can call themselves REALTORS®.|
|REGISTERED OWNER||The owner of a fee simple interest in land as registered on the title.|
|RESCISSION||In the law of contracts, a rescission amounts to the unmaking, or an undoing of it from the beginning, as opposed to a termination.|
|RESTRICTIVE COVENANT||A covenant restricting the use of the land of the covenantor (the Servient Tenement) for the benefit of land belonging to the covenantee (the Dominant Tenement). An example would be a restriction on the height of a building on one piece of land so that adjacent or adjoining lands are not put in shadow.|
|RIGHT OF WAY||A right to have access to land for a specific use, often granted to a municipality or utility company in order to provide and maintain services to parcels of land (such as underground cables or pipelines).|
|SELLER’S MARKET||A housing market is generally characterized as a “sellers’ market” when there is an excess of demand for homes over current supply as measured by active or new listings. A sellers’ market typically occurs when the ratio of home sales to active listings is above 20 per cent.|
|SGM||Special General Meeting.|
|STRATA LOT (BARE LAND)||A lot created under the Strata Property Act not comprising part of a building but with an interest in common property.|
|STRATA LOT (BUILDING)||A lot comprising part of a building with an interest in “Common Property”. Commonly known as a condominium or townhouse.|
|SUBDIVISION||The division of land into two or more parcels, generally by deposit of a subdivision plan.|
|STRATA COUNCIL||Usually 4 – 7 members elected at an Annual General Meeting to represent the strata corporation. Council members are integral to your strata corporation and help with management and upkeep of the building and assets.|
|STRATA MINUTES||Each strata corporation is required to meet (elected Strata Council) throughout the year to address owner’s concerns and report on ongoing repairs, new business and any insurance or other claims against the strata corporation. Minutes are to be distributed to each owner within 2 weeks of a strata council meeting.|
|STRATA PLAN||A strata plan is an important document for owners. It designates the locations and boundaries of the different categories of property such as strata lots, common property, limited common property, storage and locker ownership. There will be a legend at the beginning of the strata plan that denotes ownership. Every strata corporation has a strata plan registered at Land Titles Office.|
|SURVEY PLAN||A plan prepared by a BC land surveyor depicting the boundaries of one or more parcels of land. Various types of plans are registered with the Land Title Office when a parcel is subdivided, when parcels are consolidated, and when easements and rights of way are established.|
|TERM||The length of time a lender will loan mortgage funds to a borrower. Most mortgage terms run from six months to five years, after which the borrower can either repay the balance (remaining principal) of the mortgage, or renegotiate the mortgage for another term.|
|TITLE||With respect to land, title refers to proof of ownership of the “fee simple estate” or other lesser estates, such as charges (leases, for example). In BC, title to a parcel of land is legally enforceable against third parties only if it is registered with the Land Title Office. A land title is issued by the Registrar in accordance with the Land Title Act. The “title” is the basic entry in the register. It lists the registered fee simple owners, the legal description of the parcel, the PID, and any charges and legal notations registered against the title.|
|TITLE SEARCH||A detailed examination of the ownership documents to ensure there are no liens or other encumbrances on the property, and no questions regarding the seller’s ownership claim.|
|TOTAL DEBT SERVICE RATIO||The maximum percentage of a borrower’s income that a lender will consider for all debt repayment (other loans and credit cards, etc.) including a mortgage.|
|VARIABLE-RATE MORTGAGE||A mortgage for which payments are fixed, but whose interest rate changes in relationship to fluctuating market interest rates. If market rates go up, a larger portion of the payment goes to interest. If rates go down, a large portion of the payment is applied to the principal.|
|ZONING REGULATIONS||Strict guidelines set and enforced by municipal governments regulating how a property may or may not be used.|