This blog post deals with probate and what you have to look out for in a real estate transaction if an estate is involved.

If a person owning property dies then before the property can be transferred the deceased’s will has to be probated. Probate gives the executor under the will the legal authority to deal with the property of the deceased. The probated will is then registered on title and the land registrar then registers the property in the name of the executor. No property transfer tax is payable on the transfer. Once the property is in the name of the executor the executor can then sign the transfer to any purchaser or to the person who is the beneficiary of the property under the will.

If there is no will then someone has to be appointed the administrator of the estate. This is done by the proposed administrator applying to the court for letters of administration. This is a similar process to obtaining probate of a will.

The thing to remember when you are dealing with an estate situation is that obtaining probate or letters of administration takes time. The lawyer for the estate has to gather the necessary information to prepare the court papers, it has to be filed, reviewed by the court, changes might have to be made and then the court once it is satisfied everything is in order, will issue probate or letters of administration. How long the process takes depends on which court location it is filed in, how busy that court is and whether changes need to be made to the application. But you have to figure on at least two months form the time the application is filed until when probate or letters of administration are issued.

So if you are taking a listing of an estate property make sure to find out if probate has been obtained or if not, at what stage of the process it is. Any prospective purchaser is going to want to know this so they can estimate when they will be able to close and obtain possession.

David Simon

I have heard stories about agents who will approach sellers who have listed their property with another agent. They will tell the seller they have a serious buyer and the seller should cancel the MLS listing and save some money as the agent will possibly give them a break on the commission. Not only is this prohibited under the real settee rules it is also illegal under common law.

If you know of anyone who is trying to steal MLS listings you should report them to the Real Estate Council who will look into the matter and possibly start discipline proceedings. As well the Vancouver Real Estate Board should be notified as they can institute discipline proceedings as well.

At common law such action by a realtor is the tort of intentional interference with an existing contract. The guilty realtor can be sued by the harmed realtor in court. The legal action would involve the harmed realtor asking for an injunction to make the guilty party stop their approaches to the customers, and asking that full legal costs be awarded against the guilty party. If the guilty party has already stolen the MLS listing, the harmed realtor could sue for its lost commission, punitive damages, and full legal costs for the court action. The courts tend to come down hard on parties who have committed this tort.

If you find that someone is trying to steal your MLS listing you should be pro-active, just telling them to stop won’t scare them off. You should advise your managing broker who can speak to the guilty party’s managing broker, you can file a complaint with the Real Estate Council, and you should have a lawyer send a “cease and desist” letter to the guilty party to put him on notice that he will be liable for damages for his actions if he persists.

David Simon

This post is about a short primer on capital gains taxation. I receive calls every month from agents about the tax consequences of their clients selling or gifting their properties. I advise them that I can only give them general advice but that their clients should consult a tax lawyer or accountant as everyone’s situation is different. The comments in this newsletter are not meant as tax advice but only to enlighten you as to the basics of capital gains taxation.

Anyone who sells, transfers or gifts real property is considered to have disposed of it at its fair market value. Certain situations also create a deemed disposition even if title hasn’t changed, e.g. death or the 21 year rule for trusts. The amount of capital gain incurred is the difference between the cost of the property and the proceeds of disposition. The capital gain is added to the person’s income and of course is taxable. If the transaction is a capital gain (principal residence, summer cottage, second home, rental home, etc.), only 50% of the gain is taxable.

However there are some exemptions from the capital gains tax. The primary one is the principal residence exemption if the property is the taxpayer’s principal residence. When a principal residence is sold, the gain is not taxable if it has been the person’s principal residence for the whole time it has been owned. If there has been a period where the property was rented out and it wasn’t the principal residence, or if it was partly a principal residence and partly a rental property, e.g. there was suite, there could be capital gains tax payable. Also a person or family unit can only have one principal residence in a year. You can’t claim your home as a principal residence while your spouse claims the vacation home as a principal residence.

However if the property has been purchased with the intent of reselling at a profit, or developed and sold as a business endeavor the entire gain is not a capital gain but is considered business income. There aren’t any set rules about how often a person can buy or build a house, move into and reside in it, then sell it, without the transactions being considered business transactions. Canada Revenue Agency (CRA) would look at the frequency and the intent (i.e., whether the houses were being purchased or built with the goal of reselling and making a profit, or because the person wanted a new house to live in or to rent out). They might even look at a single event of purchasing or building and reselling a house and decide that it was a business transaction, even if the house has been used as a principal residence.

As for property “flips” it is my opinion that someone who “flips” does not have a capital gain but that the “flip” is a business endeavour and the whole profit is taxable as business income.

I remind agents that I offer free telephone consultations for them. If you are not sure about something related to your offer or deal, do not hesitate to call or contact me. I am also available to give talks to your agencies or even at seminars you might hold for clients. My practice areas also include corporate commercial work, leases and wills, powers of attorney and estates.

Please feel free to call for a quote for your client’s transaction. I offer fixed all inclusive charges for transactions. Other lawyers or notaries might give a quote but when the client goes to sign, they find out there are extra charges that weren’t included in the quote. I will also visit the client in the evening or on weekends to sign documents.

Yours truly,

David M. Simon

Barrister & Solicitor

This question is perhaps a question that hundreds of thousands of British Columbians would want the answer to be “Yes”. Well in reality, the answer is not that simple. While the Canadian Real Estate Association (CREA) changed its rules in March 2010 to appease the Competition Bureau the changes were just enough to allow Real Estate agents to break up the services and it gave the sellers the choice to pick and choose the services they want from the Realtor®. Most, in fact almost all Realtors® have not changed their ways and continue in the traditional way. Some forward thinking Realtors® and brokerages such as Oneflatfee.ca have used this opportunity and taken full advantage of the new rules and made a mark for themselves.

Brokerages such as ours, “Oneflatfee” can provide sellers a way to get on the all-important MLS® and get you a private listing. The Real Estate Board and the Real Estate Council do have certain parameters that the Realtors ® have to adhere to. One such rule is that only a Realtor ® can list on the MLS ® and no one from the public can have their name shown directly to the public. A Realtor ® is still responsible for the MLS ® listing and a flat fee agent can list the property and whilst the seller has most of the control the ultimate responsibility for this FSBO (For Sale by owner listing) remains the Realtor’s.

The seller can list their property using a flat fee MLS ®brokerage / flat fee MLS® Realtor® in BC and all they have to do is pay an upfront fee. It is extremely important to know that this company is from BC and not from Ontario or Quebec because a listing done from out of province will not show up for the local agents to see.

For Sale by Owner listings have become a new trend and the sellers are saving thousands and thousands in commissions. For example a $ 650,000 home sale will save the owner as $10,877. This is a huge amount of money to save and best of all; the buyer’s agent does not have anything against this property as this system pays out the buyer’s agent what they would have made in the traditional way. The seller is playing on a level playing field unlike One Percent Realty which offers only a 0.5% commission which could discourage the buyer’s agents (not that we promote that or are even remotely suggesting that, an ethical agent will still show all properties.)

Oneflatfee.ca has sold over $ 130 million in properties in slightly over 2 years and is hugely successful with rave reviews. We list properties all over British Columbia and are only a phone call/email away.

Mayur Arora, founder of One Flat Fee and pioneer in the “For Sale By Owner” type of real estate was interviewed by The Globe And Mail:

Mayur Arora is seeing something few would have expected in Vancouver’s real estate market – people walking away from deposits on houses, convinced prices will fall further.

“It happened twice in the last month. One [deposit] was $75,000 and one was a $20,000 deposit, the guys just walked away from it,” said Mr. Arora, who runs Oneflatfee.ca in Surrey, B.C. “They are going to wait it out. So they lost $75,000 and $20,000, but if the market comes down $150,000 on a $1.5-million house, that’s not uncommon.

Vancouver’s once-overheated housing market has cooled sharply, with the average price falling nearly 10 per cent in April from a year ago to $735,315, according to figures released Tuesday by the Canadian Real Estate Association. That was the largest drop since the recession and it marked the fourth decline in the past five months.

In a market once famous for being overheated, Mr. Arora said he hasn’t seen a bidding war in months. “It’s totally a buyers’ market. Buyers are determining the price,” he said. “And sellers are surprisingly accepting it. They are taking it.”

One reason for the decline is fewer buyers from Asia, something that had been driving parts of the Vancouver market in recent years, according to agents. “The number of buyers from China is definitely down this year,” said Andrew Hasman, a real estate agent who specializes in high-end homes. “We’re seeing far fewer buyers from that part of the world and that’s the reason our sales are down.”

Mr. Hasman said money flowing out of China has slowed considerably and Canadian banks have also tightened their mortgage lending rules, especially on larger loans commonly associated with high-priced real estate. Jean Zhang, who works for Sutton Group in Vancouver, agreed and said she is also seeing fewer immigrant buyers.

Over all, home sales increased slightly last month across Canada and the average price jumped 0.9 per cent on a year-over-year basis to $375,810, according to CREA figures. Prices were up in 80 per cent of all local markets. Toronto remained one of the hottest markets, with sales up 2.5 per cent and the average price climbing 8.4 per cent to $517,556 from a year ago.

“While growth in Canadian housing activity has lost some steam over the last year, the level of Canadian home prices and sales remain high,” said Diana Petramala, an economist at Toronto-Dominion Bank. She added that low interest rates continue to push demand and estimated that Canadian housing is 10 to 15 per cent overvalued, particularly in Toronto and Vancouver.

While Toronto has garnered much attention for its price appreciation and flurry of activity, it’s not the only real estate market that’s bustling.

In Regina, year-to-date prices are 9.4 per cent higher than the same period a year ago. Sales and average prices set a record last month, driven by strong population growth, including migration, and the lowest jobless rate in the country. The average home price in Regina is now $312,873, according to CREA.

“The picture that emerges from the April existing homes statistics continue to support our view that housing market activity – at least on the resales side – is on a path of moderation over all in Canada but that regional divergences remain,” said Robert Hogue, a senior economist at Royal Bank of Canada.

Not everyone is convinced there’s a housing bubble. Economic fundamentals are driving activity and prices, and many markets are still undersupplied, said Peter Norman, chief economist at Altus Group.

He points to an improving labour market, low interest rates, population growth and pent-up demand from the recession as driving activity. “I wouldn’t say it’s out of control but it certainly indicates strengthening demand in a relatively supply-constrained market,” he said.

Even in Toronto, where talk of a bubble is most concentrated, rising prices simply reflect population growth of about 100,000 people a year in a city where “severe land constraints” are limiting the ability to build single homes, he said.”

Full article: http://www.theglobeandmail.com/report-on-business/economy/housing/vancouvers-real-estate-swoon-deepens/article2433053/

What are your thoughts on the Vancouver Real Estate Market?

Oneflatfee.ca gives it’s clients the best of both the worlds. You can sell FSBO (For Sale By Owner) while being on MLS ® and you can also cooperate with Realtors® by offering them a buying side commission. The most common form of commission in today’s market is 3.22% on the first 100K and 1.15% (in the lower mainland) on the balance. If you offer this commission then you are on a level playing field with your competition. Thanks to the Real Estate rule changes in March 2010, owners can sell their home privately while being on the MLS®. Of course only a handful of Real Estate agents are working the For Sale By Owner model with Oneflatfee.ca being the first one to enter the market. With the ever growing popularity of FSBO, the process is now evolving into a more cost effective and responsive approach.

More and more people nowadays are searching homes for sale in BC on Social media and other sites outside the www.realtor.ca/ MLS®.ca

The “For Sale by Owner” way of selling is way more effective if you are on top of your game. There are certain key things that don’t cost much but will definitely help you sell your home and for more money.

Here are a few tips to help you sell your own home for more money and faster:

• One of the cheapest things to do is to have a clean yard with the lawn mowed and give the prospective buyers a neat welcome. Blow away any leaves or other debris and keep the entrance nice and tidy.
• Another very cost effective thing to do to a home to increase its perceived value is to paint the outside. As they say “a first impression lasts for ever.” Try keeping neutral colours for the inside of the house. Greys and browns are pretty good colours for the inside common areas.
• Decluttering is a big thing. Let there be space to move about inside the house. Less is more.
• Roll up the blinds and let the light come in. This always works well. People like to see how well lit the home is that they are buying.

Oneflatfee is the For Sale By Owner BC leader. We have helped over 350 home sellers sell their homes. People who have used our services have saved anywhere from $ 3,000 to $ 50,000 in Real Estate commission.

What would you do with an extra $ 10,000, $ 20,000 or even $ 40,000? Take a vacation or furnish your next home from top to bottom, whatever might be the case one thing is for sure…… you will be satisfied and one happy individual.

Real Estate Market to be in Equilibrium

Over the past year and a half, the BC Real Estate market has had a very minimal variance. The real estate market in Vancouver, Burnaby, Richmond and Surrey has remained hot whilst the market in the interior and the island has remained somewhat soft.

The B.C. real estate market may finally have reached the equilibrium investors and others have long hoped for, with Multiple Listing sales in November falling only marginally from the previous year and price growth restricting itself to a 1 per cent gain.

Let’s take a look at the property values of single family home districts in Vacouver and around:

Property Values Vancouver BC Real Estate Market

Interest Rates

Low interest rates are definitely helping the market to remain steady. If it were not for low interest rates the market would have definitely tipped. The buyers remain interested in properties because low interest rates provide the affordability.

Real Estate Market Forecast 2012

Looking into the future I believe that the market will stay steady especially because the Bank of Canada has promised to keep the interest rates low for the next year. The residential attached market (condos and town homes) in the lower mainland are definitely not going to be as hot as residential detached homes. The influx of Chinese money has sustained the price point and in fact has been a catalyst for the boom over the last 3 years or so.

Let’s look at the 2012 Canadian Real Estate Market Outlook:

Vancouver Real Estate Market Forecast 2012

Over the last year while listing and selling hundreds of properties, I have come to one major conclusion and that is nothing but just 2 major things that sell a property: namely price and the commission offered to the buyer’s agent.

That’s where One Flat Fee can help you save thousands of dollars in commission. Contact us for more information: (604) 725-1000

Consistent increases in property listings and fewer home sales over the summer months has helped move the Greater Vancouver housing market into the upper end of a buyers’ market.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales of detached, attached and apartment properties on the region’s Multiple Listing Service® (MLS®) reached 2,246 in September, a 1.2 per cent increase compared to the 2,220 sales in September 2010. Those sales also rank as the third lowest total for September over the last 10 years.

“There’s more competition amongst home sellers in today’s market, providing more options for prospective buyers,” Rosario Setticasi, REBGV president said.”Buyers now have more properties to choose from and more time to make decisions compared to the spring season.”

New listings for detached, attached and apartment properties in Greater Vancouver totalled 5,680 in September, the third highest volume for September in 17 years. This represents a 20.1 per cent increase compared to September 2010 when 4,731 properties were listed for sale on the MLS® and a 21.2 per cent increase compared to the 4,685 new listings reported in August 2011.

The number of properties listed for sale on the Greater Vancouver MLS® system has increased each month since the beginning of the year. At 16,085, the total number of residential property listings on the MLS® increased 4.6 per cent in September compared to August 2011 and rose 4.4 per cent compared to this time last year.

“Our sales-to-active-listing ratio currently sits at 14 per cent, which is the lowest it’s been this year. Generally analysts say that a buyer’s market takes shape when the ratio dips to about 12 to 14%, or lower, for a sustained period of time,” Setticasi said.

The MLSLink® Housing Price Index (HPI) benchmark price for all residential properties in Greater Vancouver over the last 12 months has increased 8.8 per cent to $627,994 in September 2011 from $577,174 in September 2010.

Since reaching a peak in June of $630,921, the benchmark price for all residential properties in the region has declined 0.5 per cent.

Sales of detached properties on the MLS® in September 2011 reached 957, an increase of 10.5 per cent from the 866 detached sales recorded in September 2010, and a 32.8 per cent decrease from the 1,423 units sold in September 2009. The benchmark price for detached properties increased 13.4 per cent from September 2010 to $896,701.

Sales of apartment properties reached 922 in September 2011, a 5 per cent decrease compared to the 971 sales in September 2010, and a decrease of 38.1 per cent compared to the 1,489 sales in September 2009. The benchmark price of an apartment property increased 4.4 per cent from September 2010 to $405,569.

Attached property sales in September 2011 totalled 367, a 4.2 per cent decrease compared to the 383 sales in September 2010, and a 43.3 per cent decrease from the 647 attached properties sold in September 2009. The benchmark price of an attached unit increased 5.4 per cent between September 2010 and 2011 to $516,697.

Download the complete stats package by clicking here.

Just got this testimonial from a client who sold her place. Really makes us happy to see how clients are saving money and enjoying our service.

“Three years ago we listed our home with the realtor who had sold it to us seven years before. We thought he’d appreciate the return business, especially since we were listed at $1,250,000.

We rented a storage locker, decluttered and staged the whole house (I’m an interior designer, so that part was easy). He posted it on MLS (also easy) and asked to have an agents’ open house. I cleaned, I baked. No-one came. I later found out he hadn’t told the other realtors in his own office about our listing, never mind any others; even his own branch manager didn’t know he had the listing.

We had three open houses. I cleaned some more, baked some more, went out for 3 hours to stay out the way each time (tedious). No-one came. He got the dates wrong. Twice. There were no other viewings either. Not one. By this time that storage locker had cost us almost $1,000.

It was hard to choose another realtor, so we went with the well-known guy with his face on the side of buses and the back of the Lower Mainland telephone directory. Our flashy new realtor posted our listing on MLS. He sent an assistant to do a realtors’ open (yes, folks, apart from the initial meeting with him, we were only allowed to speak to his staff, usually via voicemail or e-mail, often with much delay). No-one came… and he never brought a single buyer to see our carefully cleaned and staged house! Déjà vu.

We considered the FSBO (for sale by owner) option, but the biggest hurdle was not having access to MLS, and everyone knows that’s how most buyers find new homes these days, especially now that we’re all so tech savvy and connected. How I wish oneflatfee.ca had been around at the time!

Eventually we gave up and took the house off the market. Fortunately, we weren’t desperate to sell.

But this year the time came to sell a condo we’d bought with our son. And this time oneflatfee.ca was making waves on the real estate scene. Imagine – we could be on MLS at a fraction of the price of signing with an old-fashioned realtor. And my previous experiences had taught me that all realtors really want is one’s listing… after it goes up on MLS, they don’t seem to do much else! What I really wanted most of all is for old-fashioned realtors to wake up to the 21^st century… no more money for nothing!

We did however ask two traditional realtors to come and view the condo to give us an idea of a listing price. They came up with $269,000 – less than its assessed value. We just couldn’t afford to list at that price given our initial investment plus reno costs, never mind pay TWO realtors’ commissions.

So we listed with oneflatfee.ca at $299,000 and I didn’t even have to leave my office to do it. We figured if it didn’t sell at that price, we’d take it off the market and rent it out, because with oneflatfee.ca there is no contract – one can delist at any time, or keep it on the market for as long as one wants.”

Climbing home prices and tighter mortgage rules are closing doors to the real estate market for some new homebuyers, contributing to a near 15 per cent year-over-year decline last month in Canadian home sales.

The national average home price rose by eight (8%) per cent in April even as housing sales fell by 14.7 per cent from the year before, according to data released Tuesday by the Canadian Real Estate Association. This is a good indicator of how the market is performing. The bulk of the listings as well as sales still continue to come from the lower mainland of BC.

We have now listed over 320 properties and of course while we see a good mix of properties being listed from all over British Columbia but the market is really sizzling when it comes to higher end homes. A boom in sales of multi-million dollar properties, largely in the Greater Vancouver area, has been skewing the average home price upward in recent months. Average home prices in British Columbia were up 16 per cent, double the national average — sending the country-wide average higher as well.

The market is holding steady on Vancouver Island, the interior and the north. We have seen some sales going through outside the lower mainland but most of the properties seem to be selling in the lower mainland.

The number of months it would take to sell all of the listings on the MLS, another measure of supply and demand, was up to six months in April, up from 5.7 months in March. Saying that, we had a property that did not even make it to the MLS system. The property had a sign up and the client sold it within 4 hours and by the following day we had 4 multiple offers. The address of this property is 9791 129th St in Surrey.

Housing starts — another key indicator of demand for homes — were slower than expected in April, largely due to a decline in construction on multi-unit buildings such as apartments and condos. That was much weaker than economists had been expecting, as construction activity usually picks up in the spring.

A drop in housing starts and sales of previously occupied homes had been widely anticipated. However, the expected drop in home sales across Canada this year will be less than previously forecast because of stronger sales of mega-homes in British Columbia in the first quarter, the Canadian Real Estate Association said earlier this month.

CREA now expects that unit sales for 2011 will dip 1.3 per cent to 441,100, less than the 1.6 per cent decline it forecast in February.

If you are in the market to sell your property, now is definitely a good time. With more sunny days ahead, your home will show the best now and we at OneFlatFee.ca are committed to providing you with exceptional service and unsurpassed value.