Doom & Gloom, or is it?
The Real Estate Market has changed, but is it all bad? Yes, it is true, the market has completely reverted downwards from what was one of the craziest times we have ever seen in the Fraser Valley. Buyers as well as sellers are more timid, cautious and have fallen into a wait and see approach. However, homes are still selling with steep discounts compared to the peak from a few months ago. I was asked by a potential buyer, if they should wait for the prices to come down further or if now is a good time. My answer: Well, it depends. See we don't just look at the prices. Many other factors like personal financial situation, interest rates, reason for purchasing etc. play all a role in making the right decision at the right time. If you want to buy to have a roof over your head, you probably won't be able to wait forever and with rents increasing, it will also become quite expensive to wait too long. As an investor, you may want to wait a little longer, to see how it plays out. Most likely you will not need to much financing, so therefore the interest rate doesn't really matter. Our team of licensed, professional real estate agents are always happy to help you evaluate your specific real estate wants and needs and form a plan to achieve your goals in the Lower Mainland and Fraser Valley. Give us a call anytime.
Wait what? A cooling off period
The Government announced some details regarding the Homebuyer Protection Period (HPP) also known as "cooling off period". What does that mean? For quite some time housing has been used as a political point bringer by political parties in British Columbia's vast and expensive real estate market. Over the past three years in particular and long before then housing prices creeped up to ever higher levels and buyers often had to compete against each other, trying to secure their next home. This shortage of housing options was leading to times, in which multiple offers became the daily norm and buyers started trying to make their offers look as best as they can. Looking back to the last 2+ years through the pandemic, the real estate market especially in the Lowern Mainland and the Fraser Valley saw some extrem conditions of competition for houses, townhouses and condos. Potential buyers tried to secure their homes with offers, which had less and less due diligence provisions in them until many buyers took the due diligence process completely out of the equation. This means, that any of these highly competitive offers when accepted, represented a firm sale. Period. Some buyer, who didn't have enough advice or the right advice regarding the ramnifications of their doings had to endure some unfortunate situations, because of the lack of due diligence being done prior to writing the offer. No this is where the government comes in to play the Messiah. It is the governments opinion, that the market needs to be regulated. And so they started a process of consultations to find some ways to end the practice of highly competitive, subject free offers. And the industry, the governments own regulatory body (BCFSA) and others shared their thoughts of how the consumer could be better protected in a situation like this. WELL, the government decided to chuck out all the consulation and just forge ahead with their own idea of what they think will help the people. The problem is, that noone at the BC legislative level has the slightest understanding of the British Columbia real estate market and they basically screwed up again by announcing this "cooling off period". Starting on January 1, 2023 a mandatory three-day period is intended to allow the buyer to secure financing and conduct home inspections after an offer is accepted. So no more subject free offers leading to a firm sale, even if the offer is subject free. The buyer can, within this time frame, rescind from the accepted offer and face a small penalty of 0.25% from the agreed upon purchase price (e.g. $1,000,000.- purchase price = $2,500.- penalty). Now you know what we are talking about. Does it really protect the consumer? What about the sellers rights? Is it even necessary, now that the market has cooled down all by itself without government intervention? Many questions remain unanswered as it happens so often when governments try to intervene in markets they know nothing about.
Getting your Home Hunting Ducks in a Row
Say you're shopping for your first/next home. Ideally you are looking for the right property, in a fine neighbourhood and within the price range you can afford. Well, below are a few tips for tasks you should follow -minimum- to get started: A property wish list. What does your ideal home look like? How many bedrooms does it have to have? Do you require a spacious rec room? A large deck for entertaining? A pool? A view? Write your wish list down on paper. A neighbourhood wishlist. Where you live is just as important as what you live in. What qualities are you looking for in your ideal neighbourhood? Parks, Recreation facilities? Trails? Walking Distance to outstanding schools? Closer to work? A pre-approved mortgage. Getting the financing handled up front takes the guesswork out of what you can afford. Home sellers will also take any offer you make more seriously, especially when you instruct your agent to attach a pre-approval letter from the lender to the offer. Realistic expectations. 99.9% of homes sell at or near the current market value. So don't expect to find out of the ordinary bargains, that noone else noticed. Sure, markets, and therefore market values go up and down in prices, but at any given time a sale will happen at or near market value at that time. Looking for more advice on findin your next home? Call our team today and we will be happy to lend you a hand.
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