Author: Mayur Arora

The Canadian Real Estate Association (CREA) released their monthly statistics for August 2013, revealing that while the Canadian housing market has tightened, it’s still in balanced territory.

Actual activity (not seasonally adjusted) was over 11% above August 2012, which is basically inline with the 10-year average and again, sales were up on a year-over-year basis in many markets, led by double-digit gains in Vancouver Island, Victoria, Greater Vancouver, the Fraser Valley, Calgary, Edmonton, and Greater Toronto.

“Sales activity dropped sharply around this time last year in the wake of tightened mortgage rules and has improved since then, so a sizeable year-over-year increase this August was expected,” said Gregory Klump, CREA’s Chief Economist. “Buyers who put off purchase decisions or who were otherwise sidelined by tighter mortgage rules and lending guidelines implemented last year were anticipated to return to the housing market. That said, the upward trend and levels for activity in recent months has been steeper than expected, but that may not last.”

“Recent increases to fixed mortgage rates caused sales to be pulled forward as buyers with pre-approved financing at lower rates jumped into the market sooner than they might have otherwise,” Klump added. “That pool of homebuyers has largely evaporated so demand may soften over the fourth quarter. The outsized year-over-year gains may persist, however, due to weak sales toward the end of last year.”

National home sales across Canada rose almost 3% on a month over month basis from July to August. While specific local sales experienced both increases and decreases, the major urban centres and surrounding areas like the lower mainland tipped the balance to contribute to this more positive outlook. Additionally, the MLS® Home Price Index (HPI) rose almost 3% year-over-year in August.

“All real estate is truly local, but sometimes sales trends can change similarly in a large number of markets at the same time due to factors that can affect all markets across Canada,” said CREA President Laura Leyser. “The recent hike in fixed mortgage rates is one example of an influence that affects all markets, but it’s just one of many things that shape housing market trends. Your local REALTOR® remains the best resource for understanding what’s driving the housing market where you live or might like to.”

The national price for homes in August 2013 averaged at $378,369, which is an increase of over 8% from August 2012. These gains reflect last year’s declines in higher priced markets like Vancouver and Toronto. Vancouver’s long-term average proportion of national activity is 7.4% on an unadjusted basis, but fell to 4.6% last year; however since then, it has rebounded and now sits at 6.3%, which is its second highest level in the past year.

This month’s blog post contains a couple of reminders about possession dates and the First Time Home Buyer’s property transfer tax exemption.

I have been asked this question a couple of times recently. The client is buying a house with a closing of Sept. 30 but the tenant can’t move out until 2 months after closing. So the possession date should be Nov. 30? The answer is NO. If you are buying a property you want possession of it as that gives you physical control. You might not be able to occupy it until Nov. 30 but you want to be able to go it, enter it, etc. on the completion date.

With the First Time Home Buyer’s Property transfer tax exemption remember that the buyer, if he has not filed tax returns in BC for 2 of the last 6 years, has to have been ordinarily resident in BC for at least one year before the transfer is registered in order to get the exemption. So if your client is a recent immigrant, make sure to find out for sure when they arrived here. I know an agent that advanced an existing closing date because the vendor wanted to close earlier and the buyer agreed. But the agent hadn’t properly advised the client about the one year requirement and assumed the client had been here long enough. By the time the agent realized her mistake, the vendor wouldn’t change back the date. So the agent ended up paying the property transfer tax because of her mistake.

Where can I find the best Realtor® for my home buying needs? What kind of Realtor® should I get to buy my first home? Do I need a Realtor®? What are cash back deals? These are just a few of the questions that a homebuyer may ask themselves when preparing to purchase a home or property.

The simple fact is that as a homebuyer, you do not necessarily need a traditional, commissioned Realtor®. When a home seller signs a listing contract to sell their home or property through a Realtor®, the contract always states the total commission to be paid by the seller to the Realtor®, and also states how much the seller’s brokerage will pay to the cooperating buyer’s agent. Simplified, this means that the commission paid by the seller compensates both the seller’s agent and the buyer’s agent, and buyer are not typically ever asked to pay any portion of a real estate commission. Buyer’s agents are compensated through this commission that the home seller pays.

Because of recent changes to the Real Estate Act, licensed Realtors® are now able to pay cash incentives to non-licensed individuals, which means that One Flat Fee provides cash back to buyers upon the purchase of their home. If a buyer purchases a home using a licensed Realtor® like One Flat Fee, the brokerage (One Flat Fee) is now allowed to pay the buyer as an incentive to obtain business. The payment is treated as an expense and is tax-free to the home buyer. Note: this deal is not offered through For Sale By Owner (FSBO) contracts, as there are no posted commissions paid to agents on private sales.

Whether you are looking to purchase a home or property in Vancouver, the surrounding lower mainland, or anywhere else in BC, One Flat Fee has a cash back program set up for you! Our packages are as follows:

Package A

-You find your own home

-We represent and assist you

-You earn 50% cash back commission

With our “package a”, even if you’ve decided to go it alone, doing all the leg work for yourself, finding your own home, if you call us to represent and assist you, you will earn 50% of the commission!

Package B

-We do the leg work and show you homes

-We represent and assist you

-You ear 25% cash back commission

With our “package b”, we do more of the work on your behalf, finding and showing you homes, followed by representation and assistance – and even though we’re doing the leg work, we’ll still give you 25% of the commission just for choosing One Flat Fee to represent you as a homebuyer. It’s a win-win situation all around!

While many homebuyers wish to keep full control over the purchase of their new home, homebuyers still require representation, and One Flat Fee wants to represent you in your home buying purchase. So much that we pay for the privilege, offering you our cash back reward program that includes all the services of an experienced buyer’s agent while putting cash in your pocket. No gimmicks needed, just common sense.