Should I Build Or Should I Buy A Home?

If you are in the market for a new home, you may have considered building from scratch instead of buying a resale home. While the decision isn’t always simple or obvious, each option has its pros and cons.

Building a new home – advantages

Control over details

You can personalize the details of your home from the ground up – so you have more control over details. Everything can be the way you want right from the beginning. You can customize the paint, the flooring, appliances and much more. There will be no remodeling costs.

More efficiency.

A new home is built to meet current building codes, incorporate the latest technology and is often more energy efficient. You will spend less on energy as your appliances will use less energy and your home will be better insulated saving you on heating costs as well.

Everything is new.

The floors, ceilings, roof, siding, appliances, windows, etc. will be brand new. Most will come with warranties that are likely to be covered for several years. Chances are that the first few years of home ownership will incur very few costs for repairs, and you will not have to deal with any unpleasant surprises!

Building a new home  – disadvantages

Delays, delays, delays.

It is not uncommon for a building project to experience delays – blame a lot of this on the weather. Delays can be costly especially if you have sold your existing home and plan to move into the newly constructed home. They can also frustrate you mentally.

Issues with the builder.

Having a reliable builder is very important when it comes to getting permits, construction loans, adhering to the building code and timely completion. If you have a builder who does not cooperate with you regarding the aforementioned issues, you can experience a lot of stress and anxiety, not to mention the added financial burden that may arise from this.

Budget limitations.

You may want to factor in certain upgrades, which could be pricey, and you could end up spending above your budget.

Buying an existing home – advantages

Room for negotiation.

A resale home is usually less expensive than a new build and you have room to negotiate the price (as long as there is no bidding war.) If the market is “soft” then you can end up with an attractive deal. With a new build, once the builder has set the price, there is no more room for negotiation. If market prices have dropped, your price will stay the same.

Easier to move in.

Once the deal is closed, for the most part, you can move into your home without further delay. There is no wait time and no need for temporary housing.

Easy to visualize and renovate.

With a completed home, you are able to see the existing home’s floor plan and layout. You have opportunities for home improvements and changes from the moment you take possession of the property.

More desirable locations.

A resale home may be found in a more desirable location, with close proximity to schools, urban centers and recreational facilities; and the established infrastructure may allow easy access to these facilities.

Buying an existing home – disadvantages

May require extensive repairs/renovations which can be costly.

If you want to renovate a home that is already built, you may face a huge investment in time and money, which may not be worth the effort in the long run. Even simple remodeling can cost a lot.

Fewer amenities/older appliances.

When you buy an existing home, you could inherit appliances and home systems that may cost you money in updating or keeping in working condition. As far as the appliances are concerned, older appliances are less energy efficient and may eventually require expensive replacement.

Buyer’s remorse.

You could experience this if you end up not too keen on the existing floor plan. You may have gotten a good deal on the price, but in retrospect you may have regrets. This could affect your lifestyle, as you would be living in a home you were not happy with.

With all that said, every market is different—just like every buyer is different. The best way to choose the option that’s right for you is to talk it over with an experienced real estate agent. Your agent will know where the deals are, whether you’re interested in the long-time neighborhoods or the up-and-coming communities. And they’ll help you decide whether building a house or buying an existing home will suit your needs best.

Contact us If you’re looking for an agent who’s willing to do what it takes to help you find the perfect home.

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“Virtual Staging” Can Be Misleading. Make Sure You Are Aware Of This

We are living in a sophisticated digital era where real estate photo enhancement is being done on a massive scale. There is also sophisticated virtual staging software available, where one can completely transform the makeup of a listing in a very short period of time. Both factors have helped transform the home staging concept.

Consider this:

You find a house that appears to be what you’re after, and you tap into the photos section of the listing to see the interior shots. The house looks great for the asking price. Everything appears to be in good physical condition, you’re impressed by upgrade extras such as crown molding in some rooms, plus granite counters and premium appliances in the kitchen.

You call your real estate agent and arrange a visit to the house. You both walk in and what you find is not what you expected. The walls have cracks, the carpets are stained and dirty in some places. There are no granite countertops, no premium kitchen appliances. In fact, the kitchen looks really outdated and worn out.Your visit was a waste of time.

This is virtual staging at its best. It requires no physical furnishings like physical staging – just good software and imagination.

As home prices climbed over the past few decades, and new digital photo enhancement technology became widely available and easier to use, it has not been uncommon for sellers to distort their images, making the property look better than it really was.

Now that the market has cooled off, sellers of imperfect homes are resorting to the same tactics lest their listing be overlooked entirely. Photographs are being photoshopped to make them look sharpened, brightened and are cleverly edited. Rooms are being staged to look better than they actually are.

The Real Estate Council of British Columbia has tried to do renovate its legislation to reflect certain technologies. In Its 2013 addition to the Professional Standards Manual reads: “Photo-enhancing computer applications make it easy to manipulate photographs in a variety of ways. While editing out such items as a garbage can or an automobile parked in a driveway would be acceptable, removing nearby power lines or changing any physical characteristic of a property such that it results in a misrepresentation would not be acceptable.”

When looking at listings on line, the age of the home and room measurements should give reasonable hints as to the authenticity of the images. Remember, even the fanciest of photography is no substitute for an on-site visit.  

We are currently in a buyer’s market and an experienced real estate company that has been in business for over 2 decades such as ours, will be able to guide you efficiently and effectively towards your investment goals. Contact us and one of our experienced professionals will be able to answer all your questions and concerns. We have a number of very attractive investment properties for sale.

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Here Are Some Great Ideas On Buying A Home, For First Time Home Buyers

Owning a home is a dream and a goal for most of us. But today’s first time homebuyers face numerous challenges in the form of higher prices and government regulation, which makes this dream more difficult and out of reach for some.

So as a potential first time homebuyer, you have to change the way you think and act differently. Here’s how:

Get a renter to help with the mortgage payment.

If you are buying a home, then convert the basement into a suite that can be rented out. If you are buying an apartment, get a 2 bedroom one and rent out the other bedroom. You will have to compromise your privacy, but this is a useful way to get that first home you always wanted.

Lower your expectations.

Instead of a 3-bedroom home in a desired neighborhood, settle for a smaller home in a more affordable neighborhood. Fewer people spend most of their lifetimes in one home. Think about your lifestyle for the next 5-10 years and make a decision based on that.

Share the ownership.

Buying a property with family or friends may be an easy way to get that first home. This is useful if you have friends or relatives who may have that extra cash and are keen on investing with you. You need to ensure that there is a watertight agreement that avoids any future problems when you decide to sell the home or buy out the other party.

Be patient and realistic.

Take your time to furnish or renovate the home. Yes the home may not be exactly what you want, but in time you can slowly make it into what you want it to be. So Don’t immediately jump into a large spend on furniture or start fixing things the way you want the home to look like, do it progressively.

If you cannot buy, then keep saving.

If you are determined to buy a home eventually, don’t let the prices and regulations deter you. Keep saving and putting your money away for the down payment. Eventually you will find that ideal home and your life will be changed forever!

If you have any questions about this blog, or any home-related issues, please contact us and one of our real estate professionals will be glad to help.

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REGBV Report April 2019 – The Trend of Reduced Demand And Increased Supply Still Prevails In The Market.

The latest Real Estate Board of Greater Vancouver (REGBV) report on the April 2019 real estate market, shows that buyers are reluctant to get into the market and sellers are being forced to be creative. Product that is staying on the market for more than a month is seeing discounts that were unheard of 2 years ago. For a decade it has been a sellers market. This has changed.

Residential property sales totalled 1,829 in April 2019, a 29.1% decrease from the 1,829 sales recorded in April 2018 and a 5.9% increase from the 1,727 homes sold in March 2019.

“Government policy continues to hinder home sale activity. The federal government’s mortgage stress test has reduced buyers’ purchasing power by about 20 per cent, which is causing people at the entry-level side of the market to struggle to secure financing.. Suppressing housing activity through government policy not only reduces home sales, it harms the job market, economic growth and creates pent-up demand.” Ashley Smith the REBGV President said. She added,” “There are more homes for sale in our market today than we’ve seen since October 2014. This trend is more about reduced demand than increased supply. The number of new listings coming on the market each month is consistent with our long-term averages. It’s the reduced sales activity that’s allowing listings to accumulate.”

The total number of properties listed on MLS system in Metro Vancouver in April was 14,357  – a 46.2% increase compared to the 9,822 properties listed in April 2018, and a 12.4% increase compared to the 12,744 properties listed in March 2019.

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $1,008,400. This represents an 8.5 per cent decrease over April 2018, and a 0.3 per cent decrease compared to March 2019.

The all-important sales-to-active listings ratio for April 2019 was 12.7%. The general rule of thumb is that there is downward pressure on home prices when the ratio dips below 12%, and upward pressure on home prices when the ratio surpasses 20% over several months.

April 2019 Sales Stats:

Detached properties                       586                  (807 – April 2018)

Apartments                              885                  (1,308 – April 2018)

Attached properties                        358                  (464 – April 2018)

Click here to obtain a full report.

In these market conditions, you need to work with a real estate company that has the experience and know how on getting you the right home. Contact us and let one of our real estate professionals obtain the best results for you.

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Fixed Rate Mortgages Are Now More Sought After Than Variable Rate Mortgages

According to most mortgage brokers today, fixed rate mortgages are outnumbering variable rate mortgages. Until a few years ago, variable rate mortgages were the savvy homeowner’s go to choice, where the homeowner typically paid a lower interest rate for a variable rate compared with a fixed rate, and the borrowing costs would adjust when the Bank of Canada changed its overnight rate.

Since the summer of 2017, the Bank of Canada has been nudging up interest rates. We now have short, medium and long term interest rates that are very close to each other. Normally the rates go up as you go from short to medium to long-term rates.

Variable rates are influenced by short-term rates and fixed term rates are influenced by longer-term rates. If both rates are similar then the cost advantage of variable rate mortgages is weaker, as the risk reward trade off is not as compelling.

One can still consider variable-rate mortgages if one believes that the economy’s weak spell in early 2019 signals a slump that will require the Bank of Canada to cut rates. It is possible that this happens and if it does, variable-rate mortgage holders will end up saving money. However, currently there’s not enough reward to offset the risk of higher rates down the line.

Another reason why some borrowers go variable is to do with the penalties of breaking a mortgage before the end of its term. The penalties for breaking a fixed-rate mortgage at large banks are quite severe, but penalties on variable-rate loans are more modest.

When interest rates return to a normal, expect variable-rate mortgages to regain their appeal. For now, homeowners seem to agree that fixed is better.

Whether you are listing a condo or a luxury home, it does not make a difference to us. Our experienced real estate professionals are available to assist you in making the transaction as stress free as possible. Contact us by email or call us on 604 913 1000 or 604 695 1000.

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