Blog › December 2014

Should You Sell Your Old Home Before Buying a New Home?


Ideally, the time to strategize about the resale of a property is before you even buy it. We all should have a clear idea of what we want to achieve from buying a home, and how we intend to implement that when the time comes to sell. But where our home is concerned, who realistically does that? We start a family, we want to nest, we buy that first home, we’re happy. Who cares about the future?

Well, whether we did consider how to make a good purchase (the library is full of good books – including mine) or not, the time comes where a $25,000 down payment has grown into an equity of $100,000 over a few years. We have more children and we want and can afford to buy a bigger house (we do this on average four times in our lives – so get ready). And then we must face one of the biggest problems as homeowners when we think about a new dream home and then have to wrestle with the problem of not having sold the old one.

On the face of it is easy: Just sell your old house first and, flush with the money of the sale of your property in your pocket, you go get a new one. But just because it’s logical doesn’t mean that’s what we actually do. What we do is we drive around on a Sunday, fall in love (always dangerous) at an open house and then are told by the agent that we have to act fast. “The owner will not accept a subject offer” and “don’t worry the market is good – we will sell your old home in time – no worries”.

And they may well be right. But markets can change at the precise time that your home is put up for sale. So, what if the agent is wrong? That’s where the great joy of the great dream of that new home can turn into a dreadful experience.

Best advice? You should only buy that new home with a subject clause that says: “This offer is subject to the buyer selling his property on or before such and such a date.” And if the owner won’t take it? If the owner insists, you can add a 78- hour clause (if owner gets another offer, you have three days to decide on whether to buy or not).

But you are now safe. No matter what the current market conditions are, real estate markets fluctuate and are local by their very nature. Maybe the Westside is hot but Langley isn’t or vice versa. In all markets (yes, also in Vancouver), prices fluctuate, conditions fluctuate and you might be caught in never-never land – that is, having bought a new home without subjects and not sold your old one.

Stuck with getting bridge loans, credit lines and often two mortgage payments, two sets of property taxes, two strata fees, etc, this can be a nightmare scenario. Even worse, the pressure of not having sold your old house will ensure that you will not get your best price. Yes, you heard me – you WILL NOT! If you have bought and your existing house hasn’t sold and the closing date for the new one comes ever closer, you WILL accept a much lower offer than you had anticipated. Bank on it.

I have seen more people lose money by having to carry two properties for much longer than they (and their agent) had I thought possible. And remember, real estate markets can stay flat or go down longer than you can make the payments.

As with stand-up comedy and practically everything else in life, timing is everything. The degree to which your timing in buying and selling at the same time is accurate, is very often the difference between success and failure. When you look at the market you are looking at a snapshot in time. That's the way it is at that moment but in a month or a year it might be very different. Maybe the market is good today, but what if it takes three months or longer to sell yours. No matter what the circumstances you will always be better off to either sell first or at least try a subject to sale offer on the new property. Carrying two houses is often a self-inflicted wound.

If you choose to buy first, but then lose out and the house that you want sells to someone else, learn to say these three words: “So, what next!”

“But Ozzie, we love this property and MUST have it, even though we haven’t sold our old house!” Well, I capitulate immediately. If it is TRUE love than what does it matter whether you pay too much for it or don’t get enough for the old family home. Nothing more important than love!

Ozzie Jurock
Real estate investment guru Ozzie Jurock is known as one of Canada's leading business motivators with many thousands of followers, and his investor outlook conferences attract audiences of over 500 attendees every time. Ozzie is the past president of Royal Lepage in charge of 10,000 employees. He also authored several real estate books and is featured in Donald Trump's new book The Best Real Estate Advice I Ever Received.

- See more at: http://www.rew.ca/news/should-you-sell-your-old-home-before-buying-a-new-home-1.1686869#sthash.bd5bcytA.dpuf



BC Forecast to Lead Nation in 2014 Home Sales


British Columbia is projected to post a 14.5 per cent annual increase in home sales activity in 2014 – the largest increase of all the provinces and territories, according to an updated forecast by Canadian Real Estate Association (CREA) released December 15.

The association said in its report, “In British Columbia, historically low mortgage interest rates have helped fuel a broadly based increase in the number of homes changing hands this year, although activity has only recently risen above its 10-year average.”

It added, “In British Columbia, activity is still expected to be held in check by eroding affordability for single-family homes. However, with sales in British Columbia now only at [10-year] average levels, they may climb further before rising interest rates begins to materially reduce affordability.”

Nationally, home sales are now forecast to hit 481,300 units in 2014, an annual increase of 5.1 per cent.

The CREA said: “While this places annual activity eight per cent below the record set in 2007, it marks the strongest annual sales since then.”

The national average home price is now projected to rise by six per cent year over year to $405,500 in 2014, with similar annual percentage price gains in British Columbia.

To read the full report, click here.

- See more at: http://www.rew.ca/news/bc-forecast-to-lead-nation-in-2014-home-sales-crea-1.1684550#sthash.IopB4MCp.dpuf



BC Home Sales Up 8.8% in November, Prices Up 3%


The increase in BC home sales in both unit numbers and dollar volume is continuing unabated, according to a British Columbia Real Estate Association (BCREA) report released December 12.

The report, compiled from the combined monthly reports of the province’s 12 real estate boards, found that the number of units sold in BC rose 8.8 per cent year over year to 5,972 units, and the dollar volume of sales province-wide totalled $3.4 billion, up 12.1 per cent compared with November 2013.

The average MLS residential price in BC rose to $574,694, up 3.1 per cent from the same month last year.

“BC home sales were robust in November,” said Cameron Muir, BCREA chief economist.

“Improving economic conditions, strong consumer confidence and persistently low mortgage interest rates are providing a solid foundation for elevated consumer demand.

“Market conditions have improved province-wide, with most regional markets now in the mid to high range of a balanced market.”

Only three regional boards posted a decrease in unit sales in November. These were northern BC (down 6.8 per cent), Kamloops (down 5.2 per cent) and Kootenay (down 1.1 per cent).

Year to date, BC residential unit sales are up 15.3 per cent to 78,973 units, and residential sales dollar volume is up 22.1 per cent to $44.8 billion, compared with the same period last year. The average MLS residential price is up 6 per cent at $567,292 year to date.

UPDATE: Sales activity across Canada in November stood 2.7 per cent above levels reported in the same month last year, according to Canadian Real Estate Association statistics released December 15.

November sales were up from year-ago levels in about half all regional markets, led by Greater Vancouver and the Fraser Valley, Calgary and Greater Toronto.

Nationwide year-to-date sales activity in November was 5 per cent above levels in the first 11 months of 2013. It was also slightly 2.4 per cent above the 10-year average for year-to-date sales.

The nationwide Aggregate Composite MLS house price index rose by 5.19 per cent on a year-over-year basis in November.

The average price for Canadian homes sold in November 2014 was $413,649, up 5.7 per cent from the same month last year.

The CREA said, "The national average home price continues to be raised considerably by sales activity in Greater Vancouver and Greater Toronto, which are among Canada’s most active and expensive housing markets. Excluding these two markets from the calculation, the average price is a relatively more modest $331,743 and the year-over-year increase shrinks to 5 per cent."

- See more at: http://www.rew.ca/news/bc-home-sales-up-8-8-in-november-prices-up-3-bcrea-1.1663634#sthash.vYer9wZc.dpuf



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Vancouver Home Sales Beat the November Odds


Greater Vancouver's November home sales dipped from the previous month in typical November fashion, but they again beat the 10-year average and outstripped last year's November sales numbers, according to the Real Estate Board of Greater Vancouver's report released December 2.

Meanwhile, prices continued to increase for houses, attached properties and condos, with an average lift of 5.7 per cent from last November.

“It’s been a more active fall than we typically see in the Metro Vancouver housing market,” says Ray Harris, president of the Real Estate Board of Greater Vancouver.

In his video wrap-up of the latest statistics, REBGV vice-president Dan Morrison looks at projections for 2015 MLS sales and prices and notes that the BC Real Estate Association, the CMHC and Central 1 Credit Union all predict "Minimal fluctuation in home prices and sales in 2015."

Watch the video

Sales and Listings

After an unexpected surge of 3,057 home sales in October, things quieted down, as expected, in November. In all, 2,516 homes sold in November in the area covered by the REBGV. That was still an increase compared to 2,321 in November 2013.

Of the properties for sale, 1,012 were detached houses, 452 were attached (townhouses or duplexes) and 1,052 were condo apartments.

 

What’s Up, What’s Down — At a Glance
 Nov/ Oct 2014Nov 2014 / Nov 2013
Overall Sales -17.7% +8.4%
- Detached -20.9% +9.3%
- Townhome -12.7% +6.1%
- Apartment -17.0% +8.6%
New Listings -32.8% -7.1%
Current Listings -9.4% -10.2%
 

By November, people generally tend to wait until after the holiday season to list their homes, and this year is no exception. New listings were down by almost one-third, from 4,315 in October to 3,016 in November. Fewer new listings helped reduce the total of active listings to 12,553 from 13,851 in October. 

Both new listings and current listings are also down from last November. Considering the gradual gain in prices this year, perhaps savvy sellers figure they'll get a few thousand dollars more if they wait a few months. The returns beat putting their money in a GIC.

Benchmark Price (MLS® Home Price Index)

Since November 2013, prices for the three major housing types — detached, attached and condo — have increased in every community within the Real Estate Board of Greater Vancouver, with only three exceptions. (Condo prices in Maple RidgePitt Meadows and Richmond have all decreased slightly, probably because of competition from new condo developments.) Such a consistent increase is a pretty amazing feat considering the huge range of neighbourhoods and prices within the region.

November composite benchmark home prices by housing type are as follows:

Greater Vancouver MLS® Benchmark Prices % Change
 Nov 2014Oct 2014Nov 2013
Detached $997,800 +0.3% +7.9%
Townhome $480,200 +0.1% +4.8%
Apartment $380,200 -0.2% +3.2%
 

Home prices vary widely throughout the REBGV region. To get a good idea of home prices in a specific location, check the detailed MLS Home Price Index in the REBGV full statistics package.

Price increases should level off somewhat in 2015, say several real estate market experts. REBGV vice-president Dan Morrison talks about the conditions that will affect the Greater Vancouver market in the coming year in this month's video.

 

The Real Estate Board of Greater Vancouver covers Whistler, Sunshine Coast, Squamish, West Vancouver, North Vancouver, Vancouver, Burnaby, New Westminster, Richmond, Port Moody, Port Coquitlam, Coquitlam, New Westminster, Pitt Meadows, Maple Ridge, and South Delta.

The board covers only homes being resold through the Multiple Listing Service, and does not record sales of newly built homes unless they are listed with the MLS, so the house prices in the Home Price Index don't reflect all of the residential real estate sold in the area.

 

- See more at: http://www.rew.ca/news/vancouver-home-sales-beat-the-november-odds-rebgv-1.1634912#sthash.StTv1fxe.dpuf