Working with a REALTOR Brochure in British Columbia

If you’ve bought or sold real estate in Vancouver, you have probably signed a “Working with a REALTOR” brochure. If you are a first-time homebuyer, this brochure should be addressed by your REALTOR in the early stages of your working relationship.

The “Working with a REALTOR” brochure explains the agency relationship between you (the principal) and your REALTOR and the collection, use, and disclosure of your personal information.

A common misconception is that by signing this document people are committed to work with the same REALTOR for a set duration of time. THIS IS NOT THE CASE!

By signing this brochure, you are in no way obligated to work exclusively with the REALTOR or to buy/sell property. It is simply a signed disclosure expressing that the client has had his/her rights in the Agency
Relationship explained.

It’s the legal obligation of your REALTOR and his/her brokerage to protect and promote YOUR best interests. This is the foundation of the agency relationship.

The Agency Relationship is as follows:

1) Undivided loyalty. The Brokerage must protect the principal’s negotiating position at all times, and disclose all known facts which may affect or influence the principal’s decision.

2) To obey all lawful instructions of the principal.

3) An obligation to keep the confidences of the principal.

4) To exercise reasonable care and skill in performing all assigned duties.

5) To account for all money and property placed in a Brokerage’s hands while acting for the principal.

If you feel your REALTOR is not following these rules, please bring it to his/her attention. If this doesn’t work, try speaking to his/her Managing Broker.

From April 18, 2011 The Government of Canada Will No Longer Guarantee Home Equity Lines of Credit (HELOC)

In January 2011, Canada’s Department of Finance announced a series of changes to mortgage and property financing rules. These new mortgage rule changes are intended to cool Canada’s real estate market and slow Canadians per capita debt growth in the short term and support the long term stability of the Canadian property market.

Jessi Johnson a Mortgage Broker in Vancouver was kind enough to come and explain the changes.

In part 1 of 3 we talked about how the Department of Finance rule changes are shortening the amortization for high ratio mortgages. In part 2 of 3, we discussed how under the new mortgage rules it will only be possible to pull out 80%  loan to value when refinancing a property in Canada from March 18, 2011.

Today we are talking how the Government of Canada will no longer insure or guarantee Home Equity Lines of Credit offered by Canadian Banks and lending institutions from April 18, 2011.

What is a Home Equity Line of Credit?

Wikipedia defines a Home Equity Line of Credit as follows:

A home equity line of credit (often called HELOC and pronounced HEE-lock) is a loan in which the lender agrees to lend a maximum amount within an agreed period (called a term), where the collateral is the borrower’s equity in his/her house. Because a home often is a consumer’s most valuable asset, many homeowners use home equity credit lines only for major items, such as education, home improvements, or medical bills (US), and choose not to use them for day-to-day expenses. ^[1]

HELOC abuse is often cited as one cause of the subprime mortgage crisis (In the US)

In Canada, the Federal Government will no longer guarantee Home Equity Lines of Credit from April 18, 2011.

Why are the Feds doing this?

Canada’s Federal Government does not want Canadians to use their homes as ATM’s as Jessi mentions by spending the money they can get from a HELOC when their property prices go up.

Why Does it Matter if Canada’s Federal Government Stops Backing HELOCS?

Canada Guarantees HELOCS?

Prior to April 18, 2011, the Federal Government gave a guarantee to banks and other lenders offering HELOCS, that the Federal Government will cover any losses that these lenders suffer when a borrower does not pay back a Home Equity Line of Credit (HELOC). This guarantee made these loans a risk free investment for the Banks and lenders offering HELOCS because the Feds would cover any losses.

Risk + Demand – Supply  = Higher Costs

Risk costs money. When the banks and lenders who offered HELOCS had no risk of default on these loans, they had no reason to charge a risk premium in the form of higher interest rates. From April 18, 2011, if a borrower with a HELOC defaults the lender is on the hook for the loss rather than the Canadian Government.

The Bottom Line

To hedge against these anticipated losses, lenders will require a risk premium in the form of a higher interest rate on HELOCS. Some lenders may completely pull out of the HELOC market all together. Less supply of these HELOC loans coupled with stable or increasing demand means higher prices. Increased risk for lenders also means higher prices.

If you’re looking to get a HELOC after April 18, 2011 expect it to be more expensive and harder to find and qualify for.

Buying a Home in Vancouver? Check out these Videos with First Time Buyer Advice for Vancouver!

Thinking of Selling Your Condo in Vancouver? Questions? Contact Mike Stewart or Check out out these Videos How to Sell a Condo in Vancouver!

I STRONGLY ENCOURAGE QUESTIONS & THOUGHTS IN THE FORM OF A COMMENT BELOW!

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Sixteen (16) East a New Townhouse Presale Residential Condo Development in Vancouver’s Mount Pleasant

Sixteen East is anew Townhome development by Epix located at the north east corner of East 16th Avenue and Prince Edward Street in Vancouver’s Mount Pleasant district. This Vancouver presale condo development will have 17 units and these will all be townhouse style suites with front doors opening directly onto the street or courtyard. All the townhouses will include parking and those suites lacking in suite storage will have external storage.

Two Types of Townhomes

There will be two types of suites and for the most part they will range in size from 1100 to 1300sf. The first type of suite will be townhouses that open onto East 16th Avenue or Prince Edward Street with patios facing the street and then townhouses that will open onto the courtyard which will have rooftop decks. The patios and rooftop decks will have gas and water, perfect for gardening and BBQing.

How Much?

For the townhouses opening onto East 16th and Prince Edward, pricing for most of the suites will start in the high $500,000′s with one small unit for $469K. The townhomes that open onto the Courtyard with the rooftop decks will start in the low $600,000′s. Remember HST is payable on this presale condo!

Looking to calculate the HST & PTT on a property purchased at 16East? Check out this great HST & PTT Calculator!

Call 604-763-3136 or EMAIL Mike Stewart to get detailed price information!

Floor Plans HERE!

Sixteen East Floor Plans Courtesy of Mike Stewart Realtor

Interior Finishings

All the suites will have gas stoves, stainless steel appliances, granite counter tops, maple engineered hardwood flooring, and a choice of three colours for cabinetry. Italian porcelain tile can be expected in the kitchen and bathrooms.

Projected Maintenance Fees

About $0.17/square foot.

Projected Completion Date

The project is slated to begin construction on March of 2011 and Sixteen East is projected to be completed in June of 2012.

Want More Info?

Call 604-763-3136 or Email Mike Stewart

Mike Stewart’s Sales the Sixteen East Presale Condo

I helped my clients purchase 3162 Prince Edward Street for $624,900 on March 8, 2011. Call for details!

Looking for Other Vancouver Presales?

Check out m video blog posts on James Vancouver and Wall Centre False Creek in South East False Creek, a presale in Mount Pleasant Uptown by Concord Pacific, and The Rolston in Downtown Vancouver.

First Time Buyer? Check out my videos for First Time Home Buyers!

Canada’s Department of Finance, which oversees and regulates Canada’s mortgage market which has a huge impact on Real Estate in Vancouver has enacted a new series of measures to cool the property market across Canada. The changes announced on January 17, 2011 are designed to allow the government to cool the Real Estate Market without affecting the overall economy by raising the Bank of Canada’s Prime Rate.

Call in the Expert!

As I am Realtor and not a Mortgage Broker, so I called in the expert to answer my questions on the new rules. Jessi Johnson, a Vancouver Mortgage Broker was kind enough to meet with me and explain the changes in detail.

Since there was sooo much detail, we broke up the discussion on the New 2011 Department of Finance Mortgage Rules and its effects on Vancouver Real Estate into a three part series.  In part one of the series we are going to talk about the changes to maximum amortization.

Shortened Amortization for High Ratio Mortgages?

Yes! For mortgages were a Buyer is putting less than 20% down (ie High Ratio Mortgage, high mortgage value compared to property value), the new rules shorten the maximum amortization from 35 years to 30 years. But keep in mind! This is only for high ratio mortgages that are insured by CMHC! Please note!

If you are putting more than 20% down you can still get a 35 or 40 year amortization!

How can this effect Real Estate in Vancouver?

Shortened amortizations may effect Vancouver’s real estate market by making it more difficult for first time home buyers and others with a low downpayment relying on the lower payments that come with the longer amortizations to get their first mortgage. The shortened amortizations effectively reduce the amount that Buyers can borrow because they have to pay more money back faster with the shortened amortization. This will make the Vancouver real estate market more stable, but it could make real estate less affordable in Vancouver.

This could cause a reduction in demand in the real estate market in Vancouver that. Will this cause prices to go down? I’d love to hear your thoughts!

Check out Episode 2 of 3 of the 2011 Canadian Mortgage Rule Changes Refinancing!

First Time Home Buyer? *** You NEED to check out these VIDEOS with Lots of Advice for First Time Home Buyers! ***

I’d love to hear your thoughts on this in the form of a comment down below!

Share I recently had the pleasure of interviewing Jessi Johnson of the Jessi Johnson Mortgage Team and he was kind enough to explain a term that I hear regularly as a Vancouver Realtor and that is Amortization.

Amortization – What is it? Investopedia defines Amortization as follows: “The paying off of debt in regular installments over a period of time.”

Basically amortization is how long a mortgage loan takes to pay off.

Most Buyers in the Vancouver Real Estate Market start out with a 25 year amortization which will take 25 years to pay off.

At the start of the mortgage the property owner will be paying mostly interest and very little principal and at the end of the amortization the opposite is true. With a mortgage with a longer amortization (ie 35 years), the monthly payment will be lower, but the amount of interest paid per month is higher and the principal repayment is lower. Over 35 years this could result in a huge (double the amount borrowed or more) amount of interest for a property owner to pay.

Reduce the amortization and the monthly payments increase, but the principal repayment also increases while the interest paid declines and the debt is paid off in a shorter period of time.

I have embedded an amortization calculator set up for Canada to play with to help you better understand how amortization works.

I STRONGLY WELCOME COMMENTS AND WOULD LOVE TO HEAR FROM YOU!

*** PLEASE NOTE *** YOU CAN CHANGE THE INTEREST RATE ON THE Canadian Mortgage Calculator BELOW 6% IS ONLY AN EXAMPLE AND CURRENT MARKET RATES MAY BE MUCH LOWER!!

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Hiring a First Time Home Buyer Specialist in Vancouver

In Episode 2 of the Vancouver First Time Home Buyers Guide we talked about how to figure out where to buy. Once you have decided on neighbourhood, it’s time to select a Realtor.

How Much Will it Cost Me to Hire a Buyers Agent?

Nothing!? Yes, 9 times out of 10, a Buyers Agent is paid a finders fee by the Sellers Agent if the Buyer that is working with the Buyers Agent purchases the Sellers Agents listed property!

Furthermore, the Buyers Agent you hire is REQUIRED to disclose to you the Buyer in writing the amount they are getting paid by the Sellers Agent. To learn more, check out this great video on Buyers Agent Remuneration Disclosure

Looking for a Vancouver Buyers Agent? We Can Help!

My team of First Time Home Buyer specialists are focused on all neighbourhoods in the City of Vancouver and are available to help you with  your search for your First Home in Vancouver. Call 604-763-3136 or Email me to set a time to discuss your needs.

Interview Time!

Meeting a Realtor in action is very good way to interview. Visit an Open House held by Realtors you’re interested in is a great low pressure way to meet them and see if you click. Ask lots of questions!

This is what you should be looking for in a Realtor:

• Demonstrable Local Knowledge, experience, and results (i.e. Sales of Listings in the area)
• Professional – Complete Honesty, Integrity, and Reliability.
• Good Attitude – Answers calls and emails promptly & politely, has a good relationship with other Realtors and other colleagues
• Good Reputation – If you Google them or ask people in the know and bad things are said about the person you’re thinking of hiring, think again.
• Motivated – They should be keen for your business and work hard for it.
• Up to date web based research tools for Real Estate
• Works full time as a Realtor in the area of interest

Looking for a Realtor outside the City of Vancouver?

If you don’t find a Realtor with the above process or you don’t have time to find one, feel free to give me a call at 604-763-3136 or EMAIL ME.

I have a great network of good Realtors across Greater Vancouver that can help you with your search.

Check out the next Video!

Vancouver First Time Home Buyers Advice Episode 4 – How to Search for Properties

I welcome your questions and thoughts in the form of a comment down below!

The Olympics Won’t Matter That Much.

I stand by what I said in a previous prediction on the Olympics and Vancouver Real Estate that there will be minimal transactions in Downtown Vancouver and surrounding areas because of Olympic security measures. Right after the Olympics there will be a spike in activity from demand caused by all the Buyers who were unable to buy during the time the Olympics are on.

What are your thoughts?

Please feel free to leave a comment, question, or suggestion below! Thanks!

Hi All,

I have been getting A LOT of questions about The British Columbia Government’s new Harmonized Sales Tax and how it will affect Vancouver Real Estate.

4 Quick Facts on BC’s proposed new 12% HST effective July 1, 2010:

1. It only applies to BRAND NEW properties and is paid when the property completes at the Land Titles Office.  The HST is NOT PAYABLE on re-sale properties or used properties.
2. Increase in the maximum threshold for rebates on HST from $400,000 to $525,000;
3. The maximum rebate will be increased to $26,250;
4. Transitional rules will apply – if you enter a contract before November 18, 2009, but complete after July 1, 2010, the provincial portion of HST will not be payable.  This means you will pay only 5% GST, as you do today.

I’ve included the Press Releases from the BC Gov’t below.

If you’re buying a Pre-Sale, and Assignment, or a Property that is completing after July 1, 2009 and you think HST may be payable – SPEAK TO YOUR ACCOUNTANT AND YOUR LAWYER!

If you have any questions on the HST please contact me or leave a comment down below.

HST New Housing Rebates

BC HST 2009 November Housing Threshold

Looking for an HST Calculator? Check out this great video blog post on a PTT/HST Calculator!