Surrey, South Surrey, Langley and White Rock traditional single family homes are in sellers' markets, particularly in certain price ranges and locations. What does this mean for buyers? Well, in a balanced market there are enough houses for buyers and these homes generally take up to six months to sell, depending on price point. More specifically, in a balanced market there is generally six months of inventory across all home types.
In a seller's market, supply of homes is low and there are often many suitors for the same property -- resulting in multiple offers. Often homes sell even before they hit the MLS, through word of mouth, through realtors learning of upcoming listings, or because the real estate agent's lawn sign goes up before te MLS posting.
Currently, in the Lower Mainland single family homes with strongest buyer interest, the "sweet spot", so to speak are:
Surrey Houses: Priced under $700,000
Langley Houses: Priced under $800,000
South Surrey Houses: Priced under $1,000,000
White Rock Houses: Priced under $1,200,000
Being a buyer in a seller's hot market is often a knot in your stomach, nail biting, lose in the bottom of the ninth home purchase experience. So, what do buyers need to know to up their odds of successfully buying the home they desire.
10 tips for home purchasers in the seller's market
- Engage a trusted and experienced real estate agent. In fast moving markets you need a experienced guide. Ask your realtor if they have experience with multiple offer situations. Unique circumstances often require out of the box thinking.
Don't fixate on the BC Assessment value. The assessed value is very often out of date in a seller's market.
Don't expect to get a smoking deal. Often buyers don't adjust to the hot market and make an offer to purchase that is completely out of sync with the market. The seller may come back at asking price (losing valuable time) or, even worse, not even respond to the offer. In these situations your realtor may have to "eat crow" and schmooze the seller's realtor to get back into the game.
Don't sweat the small imperfections. No home is perfect. I have never once had a home inspector say, "everything is perfect, you have a gem here". There is always a list of items to address even in new home purchases.
Write in a "smart" inspection clause. Don't waive the inspection, but write in the contract a threshold dollar amount of deficiencies that you can live with. That is, depending on the value of the purchase, write in an amount that you will promise the seller to not fuss over. For example, on an $500,000 purchase, state in the contract that you will not ask for consideration for inspection shortfalls accumulating less that say $400 to $1,000 (buyer to decide) in value.
Could favourable closing dates sweeten your offer? Have your realtor ask the seller's realtor if they prefer a fast or long closing timeline? Does the seller want to rent back to have more time? This intel could make your offer preferable in the case of close offers.
Be careful with a "Subject to Sale" clause. First, making an offer Subject to Sale without having even listed your home for sale is likely a deathnail to your offer. Every seller's realtor worth their salt is going to ask for the MLS number for the potential purchasers home. In the case of multiple offers, a subject to sale of any form, is hamstringed compared to others. Read my earlier blog "Should You Sell Your House Before You Buy" for more information.
Have all your paperwork in order You may be up against "all cash" offers, and those are very strong competitors. Have preapproved financing and provide evidence of that with your offer. Sit down with your lender to determine how to speed up final approval, do everything they ask, and shorten up your subject removal date accordingly.
Timing is critical If you love a particular home, make your best offer as soon as possible. Ensure this offer is supported by a solid downpayment to show you are serious.
Don't get caught up in winning at "all costs" Don't panic and don't settle for a home you don't love. There's always a compromise, because most homes don't have all the features you desire. Make sure the home is what you are truly seeking. If not, take stock, breath deeply, and step away from that home.
This spring and summer the competition for single family homes rose quickly and prices increased accordingly, catching even seasoned market analysts off guard. The 10 recommendations for buyers that I outlined above is not an exhaustive list, just some best practices. The key to remember is that on homes in the sweet spot, you will have competition, strategy is of outmost importance, so put a good offer together, one that shines against competition.
Imagine yourself living in a Victorian home from the late 1800s in the Lower Mainland of British Columbia. It’s like travelling back in history and taking part of it in the modern times. Old houses, when adequately maintained, are beautiful in a melodramatic sense that are often lacking in modern houses. Owning one of them can make you the envy of your neighbours. But don’t let the hapless romantic in you cloud your judgment when making an older home purchase. As always, there are has pros and cons.
The Lower Mainland, refers to the region around and including Vancouver, British Columbia. The Lower Mainland also includes South Surrey, Langley and White Rock. Although Vancouver hosts new developments in terms of real estate, Surrey has also its own set of buildings, townhouses and condominiums rising up against the skyline. Vancouver and Surrey are dominant in the Lower Mainland, but the surrounding areas are catching up. Newer homes dominate in these communities, but there are still a lot of older homes.
Should you be interested in moving into an older time home in Surrey, Langley and White Rock, let the following things about Lower Midland area help you decide.
- According to the Real Estate Investment Network, Surrey has ranked as the top area for real estate development in British Columbia for four years in a row now. This is a booming investment market in the area and means that the lower entry price of certain older homes may be attractive, if maintenance issues are minimal.
- Although Surrey, Langley and White Rock are cities much younger than Vancouver these three areas also have their share of charming houses which were preserved despite the modernization in real estate. Just for trivia purposes, Langley’s oldest home was built in 1888 while Stuart Farm in South Surrey was established in 1894. Enclaves with the old-world charm still exist in Lower Mainland.
- Statistics have shown that homeowners below 30 years old have increased in the area. Thus, the Lower Mainland communities are starting to be populated by a younger generation of people who have a stronger drive to own properties than the generation before them.
- Old house purchases are cheaper compared to buying modern homes but be prepared to spend on renovations. Old houses have all the charm but they fall below the standards in terms of compliance with the required safety features and maintenance procedures.
- Please take note that some insurance companies are hesitant to insure old homes because of the high safety risks. For example, some insurers will not cover old homes that are still fitted with “knob and tube” wirings which is no longer compliant with the modern electrical and safety codes. This means that buyers will have to upgrade the electrical circuits before signing up with home insurance providers.
- Old homes also noticeably lack adequate storage spaces. Times have changed and people nowadays tend to buy more possessions that are stored and used for a long time. Realigning spaces to make way for storage is one of the renovations that need to be done in old homes especially if these will be used by large families. But since all these renovations and installations often need to be done by professionals, renovation cost will eat up a sizable amount of your budget.
- Old homes, because of their age, will decay in the long run. This means that buyers should be ready with a big budget for restoration if they still want to maintain the look of the old house in the next few years. However, restoration may be done one portion of the house at a time depending on the availability for funds. Buyers should get the services of an expert to conduct a home inspection to know which part of the house will be given priority.
- The good thing about old homes is their proximity to the center of the town so that almost everything is accessible – schools, hospitals, groceries, etc. Everything is almost within walking distance or just a short ride from your home.
- Another thing about old homes is that many of them already come furnished. This could be a positive or negative depending if the buyer likes the taste of the old owner and the price. A deal could be struck so that the furniture already comes with the purchase at a minimum additional cost. For many home buyers, getting an already furnished place lessens the headache of having to look for every piece of furniture yourself.
- And finally, ensure you have several viewings of the old house of your choice before deciding to buy it. In those visits, conduct a thorough home inspection of the premises inside and outside. Check out all doors, cabinets, rooms, storage, basement, roof and all nooks and crannies. You also need to take a look at the trees growing outside the house and whether their roots have possibly reached the basement. Consider bringing additional professionals into home inspection process so that they can give you an estimate of the renovation costs.
Buying old houses in the Lower Midland area has pros and cons. If you love the charm of older homes, and can afford the necessary upgrades, insurance and maintenance, then take the historic plunge. It’s like owning a piece of history that will enrich you, your family and the community.
Mike Alleyne604-785-7066Homelife Benchmark Realty, Surrey
Friends to Lead, Friends in "Deed"
December 13, 2013 was the long anticipated deadline for British Columbia strata corporations to produce condo depreciation reports. I imagine this had some strata councils of older buildings quaking in their boots. In the grand scheme, the report is good for property owners, sellers and buyers in the market because decision making power and comfort comes with information. In the short run, this report may "spook" some potential strata purchasers (particularly of older buildings).
The depreciation report is based on the onsite inspection of the major assets of the building including: roof, decks and balconies, club house facilities, air conditioning, paving, siding, elevators, boilers, water delivery, electrical, drainage systems, etc. The depreciation report also sets out the current condition of a strata building and its life expectancy.
This is powerful information for a buyer who will now know far more detail about their anticipated purchase than ever before. Consider a purchaser weighing the option of buying a new townhouse with smaller square footage or an older one with a very spacious floor plan. Both have newer finishings such as granite countertops, fixtures and cabinetry. The older townhome has been newly remodelled. The life expectancy and of the building and future anticipated levies are very key pieces of information. As the building depreciates, so too does that part of your asset. No amount of remodelling inside your suite is going to extend the life of the external building structure. On the other hand, the building may be well built and maintained and the life expectancy of the older building is far longer than you anticipated. The information in the report is key in this situation and will likely give the buyer the additional information needed to make the decision between new and old.
For most of us, a home is one of the most significant purchases of a lifetime. The depreciation report may "out" potential special levies that have been long needed and not dealt with or just not known. In the past, strata owners often were not given appropriate time to plan for these sometimes onerous and long term additional payments.
The long term benefit of these depreciation reports will positively affect buyers and sellers. For the first time strata owners will have in their hands a tool that can peeks decades into the future. This will allow them to pace repairs and have a more well maintained asset to sell when the time comes.
In the short run, I anticipate that the report may lengthen the sales cycle on older stratas (i.e., the buying decision for purchasers). This will ultimately effect 2014 strata property sales. Buyers simply have more information to factor into their decision. I suspect, the winter market will somewhat mask the impact of the reports on strata sales. We will only know the true effect of the reports on the strata market from realtor feedback and by analyzing the data in the busier real estate market the spring will provide.
I am strongly in favour of the report however I do have some concerns with its implementation. I'll do a follow up blog(s) on two subjects concerning the report that buyers, sellers and realtors should be aware of:
1. Stratas waiving the requirement for the report
2. The Report Preparation
Just a gentle reminder to buyers to work with a buyer's realtor and do your homework. I was recently reading that the B.C. Place huge $563 million overhaul was immediatley followed by some minor leaks. With a budget like that you'd think the stadium roof would have been sealed tight with a kiss (and a state of the art vapor barrier that couldn't possible leak in its first months). Not so, and minor repairs are now underway. That's not your and my bill, oh wait maybe, because it's publicly owned. I guess we'll see what is covered by insurance. But that is exactly my point. Buyers need to know their builders and with the assistance of a realtor, do your homework, before you sign off.
Television programs like Holmes on Homes showing disasters encountered with builders and renovators shed a light on the importance of checking out the builder of a home you are interested in purchasing. In fact, checking out the builder is a very important element of the Buyer's Checklist. BC has a bit of a history of leaks with it's Vancouver Leaky Condo Fiasco. It became a rule of thumb for realtors to warn buyers to do their homework particularly on any condos built between 1980 and 2000.
Times changed over the years with formation of the BC Housing division called the Homeowner Protection Office and website which provides a great deal of information. It is this office that licenses residential builders and also provides a searchable registry of licensees. It is important to check if your builder is licensed and, if so, are they in good standing.
Also, BC now has mandatory third party insurance on all new residential construction. There is an online guide that assists homeowners to know what is and is not covered under the new home insurance.
Buying a home is one of the biggest investments of your life. Make sure to do your homework. Your realtor will likely have done their homework on the builder, but I encourage buyers to as well.
Mike Alleyne, Real Estate AgentHomeLife Benchmark604-785-7066