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Don Goertz

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Understanding the Process of Buying a Home

Mon, 20 Feb by dongoertz

Buying a home can be:

  1. Exciting and fun or
  2. A time of stress and anxiety.
Home Buying Process

Home Buying Process

Which option will greatly be affected by what process or plan you have implemented. It will also depend on the type of Home Ownership you have decided to pursue.

Since our objective is always to make your experience exciting fun and stress free, we have a plan to help you through. You can download your free copy of 7 Steps to Home Buying Success by Clicking Here. This resource is designed to help you understand the process and to give you some tools that will help you in the decision making process. Of course, we are only to happy to help you with any of your home buying needs as well.

5 Tips to Navigating The Real Estate Transaction

  1. Don’t Obsess about Timing….. The most common question I get as a REALTOR® is How’s the Market? It seems to be inherent to our thinking that we need to maximize the value of our purchase or sale of real estate. When buying we want the best deal and when we are selling we think we need the top price. Both of these ideas could get in the way of your making a great decision. Your decision on when to buy or sell should be when you are READY. Instead of focusing on the perfect time, focus on making sure you are ready for your move.
  2. Manage your expectations….. It is really an interesting exercise to look at how our expectations have changed over the years. When I began selling real estate in 1984, most young couples would have been ecstatic to be able to buy the small 2 bedroom bungalow grandma and grandpa used to live in. Television and the experiences of our friends and family seem to have changed all of this. Everyone’s experience is going to be different and what is happening in the marketplace will impact what you might realistically expect.
  3. Keep your emotions in Check….. Buying a home is a major investment. One you will likely only do a few times over the course of your life. Don’t let unrealistic expectations of finding the perfect home put undo pressure on you. Similarly when you sell your home. You will have many happy memories and thoughts about your home. These are beautiful and special but they are also your memories. Someone purchasing your home is looking to create their own memories and won’t want to pay for yours. You will feel more in control of your decisions if you are able to stay focused and calm through the process.
  4. Research the neighbourhood….. When would you rather find out the house you are looking at or the neighbourhood has a stigma to it. Before you buy it? or after you move in? Think of how long you would like to live there and make a note of what are your must haves and what are your deal breakers. Do your research.
  5. Consider getting Professional Help….. You do not need to be alone on your journey. An experienced REALTOR® can answer your questions, ease your concerns and guide you through the process. Feel free to call me anytime you have a concern. I’m never to busy for your questions or your referrals.

Don’t forget to download your FREE Copy of the 7 Steps to Home Buying Success by clicking here.

Strata Titled Properties and the Home buying Process are our specialty. A complicated transaction can benefit from an experienced guide. Knowing what red flags to look for could save you from grief later on. Please contact us  if you are needing help in locating the right property or if you are needing help with your review of your documents.

Feel free to leave a comment or a like and share this post if you liked it.

 

 

Condominium – What is that anyway?

Mon, 23 Jan by dongoertz

We often hear the word condominium shortened to condo. And for many it has become synonymous with Apartment style housing. In this post we will unpack what Condominium really means.

The Residences by Boulevard Group - Abbotsford, BC

The Residences at Gateway by Boulevard Group – Abbotsford, BC

Terminology in Real Estate can be a bit confusing so when selling or purchasing a property, it is important to understand what it is you are buying or selling. Condominium is defined as per the Oxford dictionaries as: “a building or complex of buildings containing a number of individually owned apartments or houses.”

In British Columbia it also means any property that is part of a strata titled group of properties. This can include; Apartment style, Townhome, Duplex, Bare Land Strata, Commercial Properties and Mixed use Properties. Isn’t it obvious you ask? Not really. Especially if you are looking at a bare land strata. It is easy to think this is the same as a single detached house.

In British Columbia, these types of properties used to be governed by the Condominium Act.  This was replaced with the Strata Property Act. In my previous post  we discussed different types of ownership. It was mentioned that strata ownership represents approximately 44% of all ownership types in our Abbotsford Market. Other communities will have similar ratio’s. Be sure to note that a strata (condominium) transaction is typically the most complicated type of transaction you might ever enter into so the importance of understanding it should go without saying.

The Strata Property Act outlines the responsibilities of an owner as well as the strata corporation. That could be a new term. Strata Corporation. What does that mean? 

By default, owners of a condominium are also joint owners of any common property (Assets) of the development. This joint ownership is what is called the strata corporation. The strata corporation is managed by a strata council which acts for the benefit of the owners as whole. It is a common practise for the strata corporation to hire a Property Management company to assist them in ensuring the corporation is run correctly.

Key Areas of Condominium Ownership to Review:

·   Bylaws – Every Strata is governed by a set of bylaws. These bylaws are either established by the strata corporation or they are by default the bylaws specified within the Strata Property Act

A common error when buying bare land strata is not recognizing these still apply. Similarly with Duplex’s.

·   Strata Plan – The strata plan shows you what type of strata you are involved in and what you actually own. If it isn’t on the strata plan you don’t own it. Typically, the most often misunderstood part of the strata plan is parking. The ad said your unit came with 2 parking stalls. Do you really own them? They are all common property but are the limited common property or just regular. LCP means you are the owner. CP means the Strata Corp will designate who parks where.

·    Engineers Reports & Depreciation Reports – These reports, if available, can be key to making a good decision on whether or not you should buy a particular unit. They are also valuable tools for the Strata Council in making good decisions on managing the assets of the Strata Corporation. They are the equivalent of a home inspection on steroids.

Knowing when a major asset like a roof or heating system needs replacing is key in budgeting for a strata. Also important as a buyer to know if something major is upcoming and how it will be paid for.

·   Financial Statements – Gives you a clear picture of the Financial health of the development and where they are spending money.

A key thing to look for is whether or not the expenditures match the budget. If the maintenance budget is not being spent, are there going to be deferred maintenance issues?

·   Minutes of Strata Meetings – These minutes are the records of any Strata Council, Annual General Meetings and Special Meetings. As a buyer you will want to see a minimum of the previous 2 years on record. If something comes up and you need more info, be sure to ask.

Reviewing this set of documents will help give you a sense of the management of the strata corporation. Does the council overstep their level of authority? Do they deal with things in a timely manner? Are their changes to the bylaws moving forward? Special assessments?

This brief explanation of a condominium and what it means is only meant to alert you to some of the key areas to look at. As mentioned earlier, it is a complicated transaction and you are best advised to seek expert advice.

As a real estate professional I am qualified through education and experience to help you in one of two ways.

1.  Buying or Selling a Condominium: Able to help you navigate the entire process as your agent.

2. Strata Property Review service; A comprehensive evaluation of the key areas identified above. As a Buyer this is important before you make your deal firm. (If we are acting on your behalf as in option 1, this service is included).

Please feel free to contact me at any time should you need any help. And please feel free to comment or share this post.

Home Ownership – Which type is right for You?

Wed, 18 Jan by dongoertz

Of course you want to own your own home! This is Canada. Home ownership is the Great Canadian dream! Do you know there are different types of ownership? 

Home Ownership - Great Canadian Dream

Home Ownership – Great Canadian Dream

Let’s take this one step at a time. Home ownership has several different aspects that can affect your decision. Some advantages and some disadvantages. Click here for 6 mistakes Home Buyers Make.

4 Advantages of Home Ownership

1.  A place you call home. The place you might rent is also home but when your landlord decides it is time to sell, you are forced to move. Owning gives you the choice of when to move.

2. It is a great investment. With Real Estate you are likely going to see your investment grow over the longer term. Sure their might be some ups and downs but the majority of wealth is built through wise investments. You might want to check out a recent post we did on Property values and projections for 2017. Click Here.

3. Memories for your family are established in the family home. Your kids will grow up and leave but they will always remember where home was.

4. It is where you can demonstrate your ‘pride of ownership’. Paint your home and its walls any color you like. Decorate it with your style. Show it off. Your earned it.

3 Disadvantages of Home Ownership

1.  Home ownership has a cost to it. Acquisition cost and maintenance cost.

2. Home ownership involves an investment of Time as well as money.

3. Home ownership is not a liquid investment. Many people in rising markets have used their home equity the same way as they use the ATM at the bank. Not always a wise thing to do.

4 Types of Home Ownership

1.  Single Family Detached – 56% of residential properties sold this past year in Abbotsford on the MLS were Detached houses of some form or another. You would usually recognize this type of home by knowing it is not attached to anything and the houses around it are all different. You can be fooled sometimes by Bare Land Strata lots but a knowledgeable REALTOR would be able to explain to you the difference.

2. Attached Strata Properties – Commonly known as Condo’s or Townhomes. They represent 44% of the Abbotsford MLS sales this year. The difference between the two is a Town House will have its own door to the exterior.

3. Co – operatives – Usually town homes or condos owned by a corporation that sells shares in the corporation to the residents. Quite often a lower cost form of housing and can be great for young families. Most Co – 0ps do not allow the share holder to participate in any appreciation of value in the unit. So if the market goes up 10% your shares remain at the original price. Conversely, if the market decreased 10% your shares remain at the original price.

4. Lease-hold properties – Resemble strata with the main difference being the existence of an underlying lease on the land so ownership is subject to the lease. Not to common in Abbotsford but Chilliwack is another story. Knowing the terms of an underlying lease can greatly affect the value of your property.

Rental properties is kind of a form of ownership because as with all of the above, your payment affords you a bundle of rights to use the property. Knowing which rights you are purchasing is important. In British Columbia, you can learn your rights as a Tenant or Landlord by visiting this site. CLICK HERE

Home ownership of a strata property has become somewhat of a hot commodity lately as the price of the detached house slipped out of reach of many. And it is good to have this as a choice. When looking at Strata Properties, there are a number of technical issues that come up and will be the topic of an upcoming post.

Home Ownership is a good thing to consider. When looking into it make sure you go in with your eyes open.

4 Things You Need to Know Before You Buy:

1.  Your budget – Remember having a life is good too. Don’t become house rich and life poor. Just because the bank says you qualify for $XXX,XXX mortgage doesn’t mean you need to spend it all.

2. Size of your family – Is it going to change soon? New additions or Empty Nest? Sometimes the care of elderly parents is a consideration.

3. Location you like. Schools close, Shopping, Parks, Entertainment, Transit, Church’s. These all make for more sustainable living.

4. List of must have’s and wants. Here it is important to prioritize.

Navigating the waters of home ownership is full of technicalities, legalities and personalities. My best advice to you is to get a REALTOR guide you TRUST. Your best interests are the required priority. Please feel free to contact me should you need any answers to your questions.

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Shifting Markets – A time to Buy or Sell

Fri, 13 Jan by dongoertz

Entering what is traditionally the most active time for real estate in any given year, you might have some questions regarding whether now might be a good time to sell or not. Below is a guest post from my legal student, B. Sacamano. Good article B.

What’s a shifting market, and does it affect your decision to buy or sell?

The real estate market is always in flux to a degree. We may say that’s great for professionals who are charting sell-through-rates or contrasting economic predictions and GDP growth. But as an average consumer, is a shifting market something that we must contemplate or even consider before we buy or sell? Don’t we just move when we want to? To answer this we’ll first broadly define market changes before considering four motivating factors that influence our decision to move. This will help us determine whether we should be concerned about shifting markets at all.

Sellers’ Market, Buyers’ Market, and Balanced Market

These are common terms within the real estate industry. In fact they are fundamental for understanding how the real estate market changes. Furthermore, appreciating why, or the cause of market shifts is crucial. There are many causes that come to mind; supply and demand, construction starts, immigration, and government intervention to name a few. All of these factors will shift the real estate market, which will consequently have an effect in which market you might be buying and selling. Does this really matter? Our motivation for buying or selling may help us answer this question.

Motivation

The first motivation is strictly needs based. Imagine you are living in a cozy 2 bedroom apartment but have just had your fourth child. Besides the fact that congratulations are in order, first on your to-do list is likely to find a larger home. The shifting market may be less of a concern for you because the four faces in your reality are staring up at you. You need to move!
Secondly, we consider moving as an investment. This motivation can look a number of different ways, but the basics are that there is a financial opportunity attached to your residence. This is not just the fact that a home is an investment in and of itself (more about that later), but there is an added revenue stream attached to it, perhaps a home with a basement suite, or a duplex. Here the motivation is clearly to take pragmatic steps to utilize the space of your home for extra income. Here, the shifting market is clearly more important to your decision. The entire purpose of the move is to find that extra income from your home. What the market is doing and will be doing may have significant effects on revenue streams.

Necessity

Next is necessity, and more specifically (and to differentiate from needs motivation) I would suggest it is financial necessity. Here we find the motivation is inherently negative in nature. There is perhaps external pressures that have put you in a situation where you must sell the home to pay off expenses for example. Market changes can be extremely important in this instance. Maximising a sale price, or maneuvering a down-size can be very tricky if the goal is tied to a debt restructuring proposal.

Desire

Finally we look to desire as a motivating factor. This simply put is when you come across your dream home, the heavens part and angels serenade you with a heavenly chorus to buy it. You were happy where you were, but now you’d be happier there. The shifting market is less of a concern for you in this case. After all you can’t put a price on love, right?

So we have concluded that it’s more important to understand and consider market changes when it comes to financial motivations. We all want to maximize (or minimize as the case may be) financial benefit (loss). And a sure way to do that is to fully understand what the market is doing and how it will impact you. How will a move now impact you differently than a move in 6 months, or a year? Also, as alluded to above, our home is likely our largest asset, so why wouldn’t we at least consider what the market is doing all the time? I would suggest this is a best practice. At worst we can then make an informed decision, and at best we can make a smart decision.

Feel free to contact us at any time for an update on your values as they might factor into the market value of your home. or simply click on this link and get your home property report delivered to your email inbox. 

Property Value’s Soar – Just Check you BC Assessment!

Wed, 11 Jan by dongoertz

“Assessment Values Soar for Local Homes” reads the headline on the front page of The News – our local Abbotsford Newspaper. Other news media are calling for a “Bursting Real Estate Bubble”.  And that in some areas property values have already dropped as much as 10%. So what really is happening now to your home’s value?

A bit of history

Historically, over the longer term (last 20 years), property values have increased at an average rate of about 5.14%. This is based on some research I did on a typical house in a typical neighbourhood over a variety of time frames.

1-abbotsford-house-price-analysis-january-2017-jpgThe Blue Line represents the actual median price of a house over a 20 year period.

The orange colored line is what property values would be if the median price of a house in 1996 appreciated at the above mentioned rate of 5.14 % and where the value might have arrived given a straight line appreciation.

The Grey Line is if we just considered the last 10 years and applied a straight line appreciation of 5.14%.

As you can see, Where you start from in doing a calculation like this can have a significant affect. You can also see from the actual median price how volatile our market can be.

(Test area selected is roughly the area South of Downes Road to McLure Road. Clearbrook Road East to Horn. Date Range November 1 to November 30.)

November 30 2016 Actual Median Price $615,000.00

November 30 2016 20 year projected price $526,597.00

November 30 2016 10 year projected price $619,000.00

Another thing to consider is what has happened in the past in similar circumstances. This is difficult to determine because 2016 was quite unique to our local Real Estate history. The most recent time was the ‘crash’ of 08 and when we saw a correction of 11% to our median price. The mitigating factors here were significantly tied to the economic situation worldwide.

Our 2017 Projections

Projections are always risky places to go. There are always mitigating trends to consider and the direction those trends is still up in the air. Those trends would be:

1.       Inventory levels. – Currently low

2.       Mortgage Rates – Currently low

3.       Demand – Currently Strong

Should all things remain the same, we may see a continuation of our 10 year projected prices. However, there have been a few significant moves by our government over the past 5 months and those moves may have influenced a downward trend to prices since October of about 4% in the Abbotsford area. This could also be an indication of season. Typically sales fall off in November and December.

The comparisons we have drawn here could indicate as much as a 14% drop in property values through 2017.

“Moderating consumer demand combined with an elevated level of new home construction will contribute to average home prices edging lower next year. However, most of the change is expected to derive from the high end of the market where price gains in recent years have been unsustainable.” ~ BCREA Economists

Basically they are saying demand will drop off, Inventory levels will improve, mortgage rates will stay much the same and in Abbotsford that will mean a return to more normal market conditions.

Since we have not seen a disastrous circumstance like that of 2008,  I can only see at most a 5 – 8 % potential correction to property values should there be one. This is significantly dependent on the type of property you may own or wish to own and the area it is in. The caveat to this is as said before the mitigating factors. Inventory Levels, Mortgage Rates and demand.

It is clear, by looking at our historic price index, that our real estate market remains somewhat unpredictable in any given time frame. An important factor is the trend is just about always up so real estate continues to be a good investment and something we should all aspire to.

My advice for anyone considering a move remains as always. Get the facts and discuss how they impact your property with your experienced REALTOR. If we can help please feel free to contact us at your convenience. For a complimentary report on your property value just go to ABBOTSFORDHOMEVALUE.com Your home value delivered direct to your inbox.

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Fixture or Chattel? Does it Stay, or Does it Go?

Mon, 09 Jan by dongoertz

As a REALTOR®, the question of Does it Stay or Does it Go comes up with every transaction. The technical terms; fixture or chattel, are how they are described. As a buyer or a seller, it is important to know what is really included in the sale. I’ve asked my law student Ghost Writer, B. Sacamano,  to help answer this question and the following is his article. B’s experience includes being a REALTOR® so the fixture chattel debate is discussed in an understandable way.

house front door in fall

Have you ever bought a used car? What was included in your purchase? Were the tires included? How about the seats? Of course they were, they are after all, part of what makes it a car. The half used container of engine oil in the trunk was probably removed prior to the sale. As was the emergency road side assistance kit, and any other personal belongings not essential to the operation of the car in its capacity as a drivable car. The fuzzy dice hanging from the rear view mirror for example, the atlas in the glove box (younger readers feel free to google what that is), and the stack of cd’s under the front seat, all disappeared prior to you driving away in your new ride.

I’m hoping that this analogy will provide a bit of clarity regarding what’s included, and not included in a house sale. At the very least it should get you thinking so you can ask the right questions at the appropriate time of the sale. All too often the REALTOR® gets a frantic call after possession day regarding something that has been taken or switched out for something different. And the best way to deal with this issue is to prevent it from happening in the first place. This pre-emptive attitude will require knowledge of fixture’s and chattels.

Chattels can simply be described as personal property, and would not be included in any sale unless specified in writing. From our car analogy, this would be the half-used oil in the trunk, the atlas and the fuzzy dice. Conversely, a fixture is attached to the land (or home) in some way, and as such would by default be included in the sale. From our car analogy, this would include the tires and the seats. They are essential to what makes the car a car.

This seems simple enough, if it’s attached it stays, and if it’s not it goes, right? Not quite. Confusion arises when chattels become fixtures, either intentionally or unintentionally. You see, there is a legal principle that says whatever is attached to the soil becomes part of it. In other words, if an item of personal property is attached in some fashion to the land or the house, it will become a fixture and henceforth transfer ownership with the land.

This is of course the difficulty in answering the fixture or chattel question. The seller may have never intended an item of personal property to become a fixture in the first place, whereas the buyer may have assumed the item is included as it appears to be a fixture.  Unfortunately the courts have decided the issue both ways; they have on one hand said that the physical attachment of a chattel is enough to indicate that chattel is actually a fixture, [1] and they have also conversely said physical attachment is not enough.[2] Essentially it comes down to the particular set of circumstances.

So what’s the simple solution here? Basically, if you want the container of oil, or the fuzzy dice, make sure to ask for them. Don’t assume they are included in the deal just because they were in the car when you looked at it. And likewise, if you’re going to put the original wheels back on the car before possession, make sure to stipulate that at the outset. When in doubt, you have to write it out.

[1] Holland v Hodgson (1872) LR 7 CP 328

[2] Monical –v- 0793545 BC Limited, 2013 BCSE 25

If you have any further questions, please contact us or feel free to leave a comment or a like and check out our Facebook and twitter feeds.

Don Goertz, RE/MAX Little Oak Realty
#9 - 2630 Bourquin Crescent W, Abbotsford, British Columbia V2S5N7
Tel: 604-807-4442 Cell: 604-807-4442 Office: 604-859-2341
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