Vancouver-Condo Real Estate Newsletter

June 2010

HURRY UP AND WAIT...

There continues to be a fair number of properties coming on the market. May marked the third consecutive month during which over seven thousand properties were listed for sale in Greater Vancouver.

This represents a 48.2 % increase over May 2009 and an 8.3% decline from April 2010. Prospective buyers have a wider selection of properties to choose from in most property types and are not feeling as rushed to make a decision as they did earlier in the year.

I have recently seen a trend from sellers rushing to put their property on the market in order to capitalize on the high prices obtained earlier in the year only to have to wait longer for showings and offers. In many cases they have had to reduce their expectations (and their list price) in order to attract an offer. Similarly, I have been out with buyers eager to purchase who, at the last minute, decided to wait and see where the market is heading.

It is important for those looking to buy or sell a property to realize that real estate is local and wise real estate decisions are made by those who understand current market conditions at the neighbourhood level. I do not have the space to write about every local market in the Vancouver area but simply put, the seller of a high end home in Point Grey is in a different market position than the buyer of a one bedroom condo downtown.

PRE-SALE CONDOS

I have fielded many questions about buying a pre-sale condo from developers recently. The majority of buyers walk into a show home without a realtor and sign the documents to purchase a suite in the future when the project is complete. The Real Estate Development and Marketing Act (REDMA) does not require any particular form of pre-sale contract, so typically the contract you sign is very one-side in favor of the developer. The major concerns you should be aware of are:

1. What will be the market value of the unit by the time it is ready to occupy?
2. What will the interest rate be at the time of completion?
3. Will you still qualify for financing if either the interest rate goes up or the property value goes down? Or, if you lose your job?
4. Completion date is always subject to change by the developer even in a declining market.
5. Most pre-sale contracts grant the developer the discretion to alter the layout of the unit and the unit can generally be up to 5% smaller than set forth in the marketing material.
6. What you see in the display suite, brochures, videos or marketing material is not always what you get.
7. There are legal consequences when the buyer is called upon to complete and he finds that one or more of the above risks have materialized.

The moral of the story is conduct your due diligence, especially when buying without the assistance of a realtor. Read the pre-sale contract and the Disclosure Statement carefully before you finalize the sale. Have a lawyer review the documents. There is a 7 day right of rescission even after you sign.

Enjoy the sunshine…

I offer:

• Over 16 years of experience in your market area.
• Professional and honest expertise.
• A full service and extensive marketing plan to maximize the sale price of your home.

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