Monthly Archives: July 2017

Testimonials

We had been planning a move from Calgary to Nanaimo for retirement purposes for a few years. Upon discovering Love Real Estate Group a relationship began. Over a period of time, with patience, professionalism, good humour and integrity, Love Real Estate Group helped us secure a home that met our needs and our wishes. We are happy to recommend Love Real Estate Group to anyone looking to buy a property in the Nanaimo area.

Diane and Tom Crawford

We really appreciated Lisa’s help finding the perfect condo for us in Nanaimo. Lisa was a pleasure to work with, responding promptly, cheerfully and efficiently to even the smallest request. She worked tirelessly to get us familiar with different neighbourhoods and to consider different options. Even after the sale was completed successfully – which she facilitated professionally and expeditiously – she was always available to help. Working with Lisa was a great experience.

Alison MacPhail

Pros & Cons of Buying New Construction

Published By: on July 28th, 2017 in Category Buyer Information, Buying new construction, Nanaimo Real Estate

Written on July 28, 2017

Moving to Vancouver Island? Great idea!

Here’s some things you may want to consider:

The logistics of moving into a new town, city or province are challenging.

Often Buyers come to Nanaimo (commercial center of Vancouver Island) to stay for a weekend or even a week, to shop for a future home. They are planning a move in a month or two and need to find their new home.

Competition for resale homes in Nanaimo and much of Vancouver Island is fierce. Most homes are selling within the first few days. That makes it very difficult for Buyers who are coming from afar. You may find a suitable home online, book a flight and race out here to view it in person, only to find that the home is sold by the time you arrive.

One solution to this dilemma is purchasing new construction.

When you buy new construction you can buy yourself the time you need. There is less competition for new homes, so as an out-of-towner you will have a little more time to consider your purchase and a little more time to organize your move.

Buying new has some great advantages and also some significant drawbacks. Here’s some things you should keep in mind:

Top 3 Advantages when buying new construction:

1. AVAILABILITY – On the top of the advantages is availability. If you are not able to stay in the area for an extended period of time, you may not be able to access a resale home that meets your needs. Inventory is very low and timing is everything when you have this much competition.

2. NEW HOME WARRANTY – All new homes in BC must be covered by a New Home Warranty or an Owner-Builder Declaration. The New Home Warranty is a 10-year warranty for your home, but it is better to call it a 2-5-10 warranty. There is a 2-year warranty on labor and materials. A 5-year warranty on the building envelope, including water penetration and a 10-year warranty on the structure of the home. Owner-Builders who build their own homes and occupy them are not required to purchase a New Home Warranty. If they sell their home within 10 years then they are personally liable for any defects that would be covered by a New Home Warranty. As you can imagine, this comes with its challenges.

3. CHOICES – If you buy early enough you may have some choice regarding colours, finishes and appliances. Most new construction homes are Spec Homes. These are homes where the builder has planned and some times completed the home before having a committed buyer. In this case you will be buying the home as planned by the builder. You may have some input, but it will be limited. If you want to have control over more detail you will need to hire a custom builder. This comes with a higher price tag because it is very time consuming for the builder.

Top 3 Disadvantages when buying new construction:

1. TIME DELAY – While the timing may have been easier for you at the time of purchase, the timing of completion is much harder to predict. There is no way around the unpredictability of construction. Weather, illness, supply problems, labour shortages can all slow a project down. As a Buyer you must have a contingency plan in mind in case your move in date is delayed. Be prepared to put your goods into storage and find a vacation rental while you wait. Make sure you’ve allowed yourself some cash reserves to cover any delays. Possible delays and their consequences should be dealt with in your contract of purchase and sale.

2. SURPRIZES – It’s possible that you may arrive and find that the home is not as you expected. When you are negotiating your contract, make sure that you signing off on a specific floor plan and finishes list. Significant variation from these specifications may then be a breach of contract. However, in a rising market, the builder may be happy to back out of a contract and put the finished home back on the market to sell at a higher price.

3. CONSTRUCTION ZONES – If you are one of many new homes in a development you may be moving into a construction zone. This can be trying. Noise, dirt and congestion are the top 3 of many challenges.

Top 3 Pieces of Advice when buying new construction:

1. BUYER’S AGENT – Get an experienced Realtor to act as your Buyer’s Agent on your side. This will not cost you anything extra. The Seller usually pays buyer’s Agent fees.

2. LEGAL ADVICE – Ask a local lawyer (one who knows the local market) to look over your contract to make sure that you are protected in case of major delays or departures from your plans.

3. RESEARCH YOUR BUILDER AND THEN PLAN IN SOME FLEXIBILITY – Most builders have great intentions and take pride in their work. Their reputations are very important to them. Even the best builder cannot control every aspect of your project. A bit of flexibility on your part can keep communications open and cooperative getting you moved in as soon as possible.

Mortgage Insurance VS Life Insurance

Published By: on July 20th, 2017 in Category Home Owners Hints, Nanaimo Real Estate

 

 

Written on July 20, 2017

When you arrange a mortgage with your bank or other lender you will be offered Mortgage Insurance. It is hard to know what to say. It reminds me of standing at the Rent-a-Car counter trying to determine if I need their “strongly recommended extra insurance”. What to do!!

Yesterday an insurance agent explain it to me like this:

Here’s the concept:

In case of death, Mortgage Insurance will pay off your mortgage.

Here’s the catch:

1. Mortgage Insurance does not underwrite your policy until you apply to have the policy paid out. Underwriting means that they accept liability under an insurance policy, thus guaranteeing payment in case loss or damage occurs. This means that even though you have paid for the insurance, it still may be denied. Apparently only 66% of policies will ever pay out.
2. It’s expensive.
3. The bank is the beneficiary.
4. The cost is the same no matter how much is remaining on your mortgage.
5. You may not be able to insure both you and your spouse.

Here’s the alternative method of securing your mortgage:
Buy Life Insurance:

1. Life Insurance is underwritten at the beginning of the process, ensuring that you qualify before you pay.
2. The cost is less expensive (half) compared to mortgage insurance.
3. You are the beneficiary and you can choose how best to apply the funds.
4. The policy does not depreciate with the mortgage.
5. You can insure both you and your spouse.

Conclusion – The only thing that mortgage insurance has going for it is convenience – point of sale. Clearly purchasing Life Insurance instead of Mortgage Insurance will give you a more secure, higher pay out at less cost.

Interest rates are rising – what does it mean?

Published By: on July 17th, 2017 in Category Nanaimo Real Estate

Written on July 17, 2017

As many of you know, the Bank of Canada raised its interest rates on Wednesday, for the first time in seven years. Rates went up ¼% – not a drastic rise, but certainly a sign of change. Experts expect more gradual increases in the coming months, with mortgage rates stabilizing again at around 3-4%.

This is good news for investors and bad news for buyers. It is important to keep these increased rates in perspective. 3-4% is still a historically low rate. No one is forecasting a return to the 18-20% rates of the past.

The rate change is due to the strengthening Canadian economy and concerns about increasing consumer debt. Last fall the banks brought in a tougher stress test for mortgage qualification. In order to qualify for a mortgage at 2.4% interest, you had to qualify for at 4.8%. This measure was to insure that borrowers would be able to make their payments should rates increase.

HERE’S WHAT IT MEANS:

  • If you have a fixed mortgage, your interest rate will remain the same until it is time to renew your mortgage.
  • If you have a variable mortgage or a home equity loan, your rates will go up, and your payments will be increased.
  • Expect another increase in the stress test.
  • Expect several more small increases.
  • If you are thinking of buying a home – now’s the time. Lock in the current rates for your mortgage but also make sure that you do not over extend yourself. You’ll need to leave room to absorb slightly higher monthly payments.
  • If you are thinking of selling a home – now’s the time. There will be a flurry of buyers trying to lock in the lower rates before more increases come. More Buyers = a stronger Seller’s Market and rising prices.

If you have questions about how these changes affect your situation, let’s talk.  Call Love Real Estate Group with RE/MAX of Nanaimo at 250-802-9810