Real Estate Blog & Resources

Another form, another disclosure-the Disclosure of Multiple Offers Presented (DMOP)

In a multiple offer situation, if the Seller chooses to accept 1 of the offers as is usually the case, the listing agent will provide a form to all competing agents.

This information will confirm the date of the offer & which broker submitted a competing offer even if there is just 1 & also will include any from an unrepresented Buyer.  A copy will also go into the the listing agent's Brokerage.

Strata fees always get the attention of Buyers because they add to the monthly costs of owning a strata property & in the calculation of how you qualify for a mortgage.

When Buyers say "oh good, the monthlies are low", I know they don't fully understand the impact.  Low fees mean a greater chance of levies in the future as the contingency fund can't support any major expenditures.

If monthly fees are very high, we want to know why too.  

What is the right amount?  Strata fees have gone up in the last few years due to increased costs of insurance & maintenance.  On average, they are going up 8.7%/year per Condo Clear Services

Reading the Depreciation Report, Financials,  & Annual General Meeting minutes will give you more insight into the reasons for the amounts charged each month.

"Do you need a garage with this $13million home?"

Everything else was a go-it ticked a lot of boxes for my Buyers but...even though street parking is the norm in this part of town, it's not for everybody.  It's especially difficult if you're used to living in a condo where parking is part of the package & is expected.  There isn't anywhere else to park!

So what is the real question?  What's reasonable to expect from a home based on price?  What are you willing to trade off to get all the other home features that you want?  What concerns might you have about buying a home with an obvious drawback for other future buyers?

Of course they do but not for the reason you may think.  In real estate, there are a few holidays that impact sales.  We're experiencing one right now.

Historically the first week or even 2 of July are slower as people use that extra day to tag onto their vacation time.  it's also the beginning of summer for kids who are out of school so a good time for families to take their summer vacation.

Don't worry, it picks up again but this part of the year is always a little quieter.

Those fixed interest rates were going up on mortgages.  Did you think they only went up when the Bank of Canada announced a rate hike?  You're not alone.

This recent rate increase only affects variable rate mortgages & those who have them have seen their payments skyrocket.  However...

Fixed rates which are tied to the bond market have taken a few increases over the last couple of weeks.  That affects anyone wanting to purchase a home with a fixed rate mortgage which is everyone these days!  If you have a rate hold, you're good for that period of time (up to 120 days typically) to close at that lower rate.  Anything after that will go the new current rate.

Work with a professional to stay in the loop & understand these changes & how they could affect you.

That's the relationship between interest rates & listings it seems.  The higher the interest rates are, the less likely homeowners are to leave their lower interest rate mortgages on their current homes.

What about the relationship between interest rates & Buyers?  If they go high, Buyers may decide to wait & see if the prices go low, or at least lower.

Interesting times & new territory.

How does that work??  With the limited inventory in most markets, pressure is put on price by Buyers.  We continue to see & experience multiple offers at many price points, not just at the lower end of the market.  It only takes 2 to go multiple!

If there's so much interest why aren't sales up you may ask but we cannot sell what isn't for sale.  It's partly the cycle of Buyers won't sell if they can't find something to buy combined with homeowners sitting on very low mortgage rates who cannot afford the increased costs of a new mortgage if they're moving up the housing ladder.

What's next?  More of the same until inventory increases or the number of Buyers declines.

Interest rate hike today to cool off the surging real estate market.  Hmmm

One of the reasons the market is so active is that yes, there are Buyers but for very few listings.  Why so few listings?  One reason is homeowners sitting on mortgages with very low interest rates.  Now they're even lower in comparison & even less likely to move.

Look for even more activity from Buyers as they strive to use up their rate holds before they expire.  It could take a while to see the impact.

Headlines recently about how it's getting more & more expensive to be a real estate investor.  What's an investor?  A person or company who decides to buy real estate for the purpose of leasing or renting it out.

Rising financing costs place a bigger burden on the owner who will be looking for bigger rents to offset those costs.  Bad news for renters but it's always a question of supply & demand that sets price in the end.  It can only be what the market will bear.

In Vancouver it has always been a challenge to cover operating costs & money was made on the lift when the real estate was sold.  There's more attention now on rising costs as owners have been hit with costs of entry, operating costs (maintenance fees in the case of condos), insurance in the case of single family homes, & in the case of older buiildings, the costs of repairs & replacements.  

So we have rapidly rising costs for most landlords but rent controls with existing tenants which doesn't come close to offsetting them.

When a clients wants to know about investing in real estate, this is the information I share.  Investors must be clear on the short & long term costs & benefits to make a decision that makes sense for them

Rising prices are making Sellers happy-no surprise there.  Sellers are Buyers usually though so they may feel the pain when buying.  

Another group that is getting happier & not so obvious, is those homeowners renewing their mortgages.  Why?  When prices dropped during all the interest rate hikes, it often ate up the equity in a home.  Traditional lenders want a minimum of 20% equity so now that prices are coming back, it should put a smile on this group's faces.

They say location counts in real estate but it's also timing to max out the price on the sale of your home.

You may have heard of the "Spring Market" & historically that has been a great time to sell, but what about the other months of the year if you can't make it happen in Spring.

A recent study was released showing the relative benefits of selling during the calendar year.  This data was tracked over 11 years & more than 46 million houses & condos.  There will always be local differences but overall it's a trend that's our best barometer of selling for the most & maybe for Buyers, times to avoid if they can.  Read more about this here.

We've always heard that there's a "spring market" in real estate going back years when families bought in the spring so that they could move & their children could be registered for school in time for September.

Depending on where you live there could be other peak selling times too but the most comprehensive report has recently been released from Attomdata.  It analyzed 51 milion sales of houses & condos in the US over 11 years & found that Sellers got the highest premium on sale price during these months:

May 12.8%

June 10.7%

April 10.3%

Every market is a little different but it does show a general trend that's hard to argue based on their data.  Not surprisingly, the price premium declines in the last few months of the year.