Follow local house hunters as they experience the highs and lows of trying to buy a house in the Metro Vancouver real estate market. Our first house hunter, Elaine, has bought, so now we welcome Gerald and May, who have just started the process. We'll check in with them every couple of weeks.
Our new House Hunters are what's known in the real estate biz as motivated.
May and Gerald are both in their thirties and employed full time. They have a small toddler to keep up with. Home is a 664 square-foot one-bedroom + den condogreat for singles or a very affectionate couple, but constricted when you add an energetic and mobile youngster to the mix (at least they don't have to worry about losing track of him). They want to expand their family in the near future too, so, despite a slow real estate market with very little inventory available, moving is on their minds.
Their condo, in Vancouver's Collingwood neighbourhood, is seven years old. They bought it in 2008 for $323,000, just before the Vancouver real estate market took a steep fall. According to the MLS® Home Price Index, the price for the typical condo in Vancouver East hasn't quite reached that previous peak. A look at comparable one-bedroom Collingwood condos in the same size range shows an average sale price in 2012 of $296,316.
However Gerald and May have done a lot of work to their home to update it and give it an upscale look and feel, so they know it will show well against the competition.
Their first step was to go to a mortgage broker to see what they could afford. He gave them two scenarios: keep the condo to rent out and try to find something inexpensive to buy, or sell the condo and buy something better. If they want to keep the condo they'll have to find a house or townhouse for $380,000. If they sell first, they can look in the $500,000-to-$550,000 range without stretching too much. And a property with a mortgage helper will add $36,000 to what they can afford. They've chosen to look for a home with a rental suite.
Where to go
Knowing they're unlikely to be able to buy a house within Vancouver city limits, they've already driven around some neighbourhoods outside Vancouver they thought they'd enjoy living in. Like many other young families priced out of Vancouver, they're looking at the Fraser Valley.
"We were thinking North Delta or the Sullivan Panorama area in Newton. But a lot of North Delta was older. Sullivan Station or Panorama Ridge is better for us because we wouldn't have to do renovations," says May. "We've got a baby."
They like the area for a lot of reasons. "It's got a nice community feel: kids playing in yards, people walking in the streets. It's a lot of houses within short blocks. Not sparse. The ones we're looking at are five years old. It's a new community for a lot of young families."
Disadvantages? "There's not much within walking distance. We're so used to being in the city... it's only a five-to-ten-minute drive to get what you need, though."
The commute would be about an hour and ten minutes by bus, but May says, "We lived up at SFU for a while and I used to be able to sleep on the bus.
"We would consider buying a house in another area also if we could find one with a suite that's near schools or universities. We want to have the possibility of renting out."
Best interests at heart
|Family size||Three a couple and their toddler|
|Currently||Own a 1BR condo|
|Budget||$500,000 to $550,000|
|Neighbourhoods||Sullivan Station/Panorama Heights, Surrey|
|Looking for||Detached house or townhouse with rental suite|
Finding a Real Estate Agent is now the priority.
"We know we'll need a Real Estate Agent to sell our condo," says May. "There are three new towers being built around where we live. And even though we've upgraded everything, to buyers the new condos are going to look like a better deal.
"People are waiting for the HST to come off, and even though all that tax will still be reflected in the price of a new condo, people are just looking at numbers.
"We know that the market is really slow, too. That means that it might be slow to sell our condo."
The search for the right Real Estate Agent has been a little bit frustrating. May says it's "almost like dating all over again. How do you know if they're looking out for their own best interests or yours? We want someone who'll see different things that we don't see. And we don't want someone who won't budge on their commission. I think if they offer a $1,000 kickback I'm a lot more interested. I'm not talking a huge amount... just something."
Real Estate Agent commissions are negotiable, a fact that not every home seller knows. They're not set by law, but there is an unofficial standard. In BC, Realtor Estate Agents commonly charge 7 per cent on the first $100,000 and anywhere from 2.5 to 3.5 per cent on the balance. Commission rates vary from agent to agent and brokerage to brokerage. Before April 1 of this year the commission is subject to 12 per cent HST, but after that only the 5 per cent GST will apply. While it's wise to use a Real Estate Agent for both selling and buying a home, only the seller pays a commission. The buyer's agent gets a cut of the commission paid to the seller's agent.
Like most real estate buyers/sellers, Gerald and May have done a lot of initial legwork without the help of a Real Estate Agent. They've fixed up their condo, looked at a lot of listings online to get a feel for prices in different areas, and gone to visit neighbourhoods they think they'd enjoy. Now they're ready to go, and for that they want expert help.
We'll check in with them in a couple of weeks to see how their progressing with selling their condo and buying a house.
Follow House Hunter Chronicles 2 as Gerald and May chronicle their adventures:February 1, 2013: Slow Start
And check out the full series about House Hunter Elaine.
And if you're currently looking to buy a home and/or sell a home, get in touch! We're looking for house hunters who are willing to tell us about their experiences as they go through the sometimes exhilarating, sometimes frustrating process of buying a home in Vancouver. Those selected will earn $500. Details here.