Although a few months have passed since this program was unveiled, we're now getting some more clarity on some of the finer technical points surrounding BC's program aimed at assisting first-time buyers to get into a home more easily.
 

1. The mortgage insurance premium you pay is based on the amount you personally are putting down, not the total downpayment with the government money included.
 

2. On mortgages plus improvements (example: a $400,000 house plus $40,000 needed for immediate renovations), the program will lend based on the $400,000 purchase price, not $40,000.
 

3. The program will still assist with down payments obtained non-traditionally (ie: not through savings or RRSP's, but rather through certain types of gifts, etc.), but the insurance premium is simply higher.
 

4. Even if a buyer has saved their own down payment, it may make sense for them to use the program in order to get into a higher price range of home, or to put "more" down on the one they're buying, for leverage purposes.
 

If you have questions about the program, how to apply, what the parameters are, or anything else, feel free to give us a call!

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Last week, I attended a session where consultants from CMHC (Canada Mortgage & Housing Corporation) shared stats they have and trends that they see. It's very insightful because CMHC has many statistics that I don't typically have access to and these give us a strong indication of what the market is doing.

 

1. The number of sales to active listings is very similar to what it was this time last year. The supply of homes on the market is still low in relation to the demand in nearly every price range. This could lead to an upward pressure on prices yet again.
 

2. This is interesting: for the past few years, and even despite the sharp rise in prices over the past year or so, attached housing has always made up approximately 60% of the sales in the Lower Mainland. This shows that, despite how highly-priced detached housing has become, there's still a strong and stable demand in nearly all price ranges and for nearly all types of housing.
 

3. When prices rise drastically over a short period of time, generally those who suffer first are the would-be-first-time buyers. However, we're still seeing the new records for numbers of new household starts being established by people who are new to the real estate market or individuals/families new to the area. In other words, prices have gotten high enough to alter what most people are buying, but not so high to completely eliminate many of the first-time buyers in the marketplace.
 

4. Based on predictions of how many new household starts will occur in the Lower Mainland, it's still a concern that there will be a shortage of new product on the market to meet that demand.
 

5. All of this has happened despite the amount of money foreign buyers are spending here on a monthly basis dropping by well over 90%.
 

So, what does all this mean? In short, we expect prices to continue to increase. At the end of the day, the people paying the "outrageous" prices here and now are local people, not foreigners. They're people who've decided that they'd still rather pay whatever it takes to live here than move outside the Lower Mainland where it's noticeably cheaper.
 

Have any questions? Give us a call and we'd be happy to chat with you!

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We work with a very large group of buyers who are purchasing their first home in their late 20's, early 30's, or even later. With increases in prices of housing everywhere, this is unfortunate but not surprising.

As we've looked at why this is, a common pattern we've come across is that often times people severely delay their purchase process by renting something which EXCEEDS THEIR CURRENT NEEDS.

What we mean by this is that people will rent a place that is "comfortable" for them but comes with a higher rental price, rather than living in a rental that provides for their basic needs without a bunch of extra dazzle.


If this is you, we recommend finding the least expensive rental option that most satisfies your basic needs. By doing this, you will discover two main benefits:
 

1. You will be able to put more money away each month for your purchase. This not only speeds up the process, it also gets you into the market sooner and probably at a lower price.
 

2. There's more motivation for you to move to your own home if you are currently living in something that checks fewer of your "Perfect Home" boxes. People are generally more eager to move when there are motivating factors. The desire to move to something more comfortable, better located, bigger, or whatever else we're looking for, often creates more urgency in many of us. People who are renting something the suits all their needs and their preferences generally aren't motivated to moves as quickly.
 

EXAMPLE:
 

We recently spoke with a family of three who aspire to purchase a home. They currently rent the upper two floors of a 3-level home for around $2400/month and have been doing so for a few years now. This family could probably easily find what they need for around $1800/month in a townhome, or (to be extreme) a basement suite for $1300 in the same neighbourhood. This would allow them to save much more.

If they put aside that extra $7200 per year (if they rented a tonwhome) along with an additional $200 or so per month in budgeting, over three years they would have their $30,000 down payment!
 

The basement suite option would put them closer to $50,000 in three years! That's if they simply put the money into a savings account each month and didn't use any other short-term investment options over those three years.

My question is: would this family really suffer by renting something just a little smaller or further out of town with the same number of bedrooms while preparing to buy their own home? Probably not.
 

Short term discomfort is better for long-term gain.

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The past couple of weeks, especially last week, we're seeing signs of the typical spring market heating up. More listings coming onto the market, more buyers showing signs of increasing levels of motivation, and more traffic through open houses.
 

What we're seeing is that detached houses, although still selling steadily, are more or less remaining around the price points we would've expected them to sell a month or even two or three months ago. Sometimes a place will surprise us and go into multiple offers, but often the homes are simply selling within a week or two and for pretty close to asking price.
 

Townhomes and apartments, on the other hand (particularly townhomes, as they cater to a larger market) are still going up in price. Townhomes are more and more becoming what families are considering as they're a longer-term option, and they're also becoming a more attractive option for investors as rental rates continue to climb in light of prices limiting such a high number of people.
 

Apartments in much of the Fraser Valley are being scooped up generally by first-time buyers looking for any stepping stone into the market here.
 

Expect these trends to continue, as the gap in price between detached houses and strata is still fairly wide. Whenever this gap narrows, we may see things level off a little more.


If you have any questions, give us a call!

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"REAL ESTATE AGENT"
 
Most people personally know at least a few realtors or, if you don't, you have a close friend or family member who probably does. With so many realtors to choose from, how do you select the right one to represent you in your purchase or sale? Here are a few questions to consider as you look for a realtor:
 
1. Are they experienced enough to handle your type of transaction?
Remember that age does not necessarily mean experience, either!
 
2. Do they understand enough about what you are personally going through in your own housing situation to be effective in helping you navigate the process?
 
3. Do they have a team?
A realtor working alone can only do one thing at a time and can only be in one place at a time. Sometimes 'time' can be a critical issue!
 
4. Do they have connections to other professionals who are equally as knowledgable?
Having a realtor who's in cohesion with a good mortgage broker, lawyer, accountant, inspector, and people in trades not only speaks to their credibility, it also assists in ensuring that your experience will be the best it possibly can.
 
5. Do they have the resources to properly advertise and market your home?
Most realtors put your place on the MLS and wait for it to sell. That's not enough! Find a realtor who will be active in advertising your property through multiple platforms.
 
6. Do they have connections to find you the home you're looking for, and to find it before someone else does?
Again, a realtor who simply uses the MLS is not enough. Find a realtor who is actively working for your benefit, not passively waiting for something to show up.
 
These are just a few criteria to think about when searching for a realtor to work with. There are many other factors to consider before committing to someone and we'd be happy to provide you with more questions to ask!
 
At The Reimer Group, we are determined to serve our clients with integrity and hard work. If you want to discuss how we differentiate ourself from our competitors, give us a call. We'd love to chat with you!
 
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