Fraser Valley Real Estate News & Market Trends

You’ll find our blog to be a wealth of information, covering everything from local market statistics and home values to community happenings. That’s because we care about the community and want to help you find your place in it. Please reach out if you have any questions at all. We’d love to talk with you!

Sept. 7, 2020

From Tenant to Owner

From Tenant to Owner: 

Enjoy this walkthrough and the lovely story of our clients, They were renting for a really long time and we were able to help them get the right mortgage, low-interest rate and a beautiful condo that they absolutely love. It's a pleasure to have clients that become friends and it was amazing seeing them 2 months after they moved into their new home. If you are curious about the market or have a question please feel free to reach out to me via text, call or email. 

Raj Batra 
778.829.2300
raj@batrahomes.ca

Aug. 29, 2020

Can you get a no down payment mortgage?

by Tim Bennett

Every mortgage requires a down payment, it’s an unavoidable fact in Canada. But are there ways to get a no down payment mortgage? And further, is it a good idea to get a mortgage with no down payment?

This article has everything you need to know about no down payment mortgages. Here’s a quick warning though: It’s generally a bad idea to get a no down payment mortgage. If you’re thinking about one, it’s absolutely worth speaking to a licensed mortgage broker first.

Do no down payment mortgages exist?

Sort of. While the Canadian government outlawed zero down payment mortgages in 2008, it’s still possible to get a mortgage without a cash down payment by borrowing the minimum down payment*.

The only approach available today, called Flex Down, requires you to use your credit card, or another line of credit, to borrow your minimum down payment, typically 5% – 10%. As you might imagine, these loans are riskier and more expensive than traditional mortgages.

*Minimum down payments range from 5% to 20% depending on the purchase price.

Why you might not have a down payment

There are lots of reasons why you might be looking to buy a home but not have a down payment saved. Of course, you could have just not made the effort to save one, but most people in that situation aren’t looking to get a zero down payment mortgage.

The more likely scenario is that you were totally ready to buy a home with a down payment saved, but something happened that depleted your savings in a hurry. A family emergency, a surprise pregnancy, or a global pandemic are all unfortunate but legitimate issues that could leave you looking for a mortgage with no down payment.

Should you get a zero down payment mortgage?

The short answer is no – it’s generally not a good idea to get a mortgage with no down payment. While it’s technically possible to get a zero down payment mortgage, it’s very hard to do – and that’s by design! Here are a few reasons why they can be a bad idea:

Lack of home equity: The first reason to avoid these mortgages is they will leave you in a lot of debt without a home equity buffer. Even a 5% down payment will leave you with a small amount of equity, which gives you some wiggle room if you needed to sell your home in a hurry.

Higher CMCH insurance premiums: A mortgage that uses borrowed money to make the minimum down payment also incurs higher mortgage default insurance premiums. Coverage is compulsory for all mortgages with less than a 20% down payment, but insurers like the CMHC** typically charge an extra .50% for premiums on a zero down payment mortgage.

Additional interest: Another drawback of a zero down payment mortgage is that you’ll have a lot more debt to pay interest on. If you borrow the 5% minimum down payment from a credit card, or another unsecured line of credit, you’ll be charged a high-interest rate on that amount. 5% of a typical mortgage, at a typical credit card interest rate of ~20%, could result in thousands of dollars of additional interest each year!

**Due to the ongoing COVID-19 pandemic, the CMHC is not currently issuing mortgage default insurance on mortgages with borrowed down payments. Other mortgage default insurance providers, however, are still doing so.

How to get a no down payment mortgage

Still keen to get a mortgage with zero down payment? Here’s what’s you’ll need.

A Flex Down lender: Not all mortgage providers offer Flex Down mortgages, so you’ll need to find a lender that does. Most mortgage brokers will be able to help you find one.

A very good credit score: You’ll need a much better credit score than the average borrower to be approved for a no down payment mortgage – somewhere north of 680 is ideal.

Excellent credit history: In addition to your credit score, your prospective lender will want to see several years of perfect repayment history. That means no missed payments!

Sufficient and stable income: You will need to prove you have enough income to cover all of your payments, as well as a history of steady income. The longer you’ve been employed full time, the better your chances of getting approved.

Strong debt ratios: Your lender needs to be more than satisfied that you’ll be able to easily service your mortgage payments, as well as your other debts – including those associated with borrowing your down payment. Your debt ratios are used to calculate this.

The bottom line

A no down payment mortgage is not an ideal way to buy a home, and you should avoid them if you can. Taking more time to save a down payment, buying a cheaper home, or continuing to rent are all viable alternatives. There are significant costs and risks associated with zero down payment mortgages that you would do well to avoid.

If you’re still thinking about a no down payment mortgage, then be sure to book a free consultation with a licensed mortgage broker. They’ll be able to give you expert advice on your situation and help you find the best mortgage provider for you if you decide to go ahead. 

If you need guidance with a mortgage and want to find out about your qualification, I can connect with you with industry leaders. 

Aug. 14, 2020

Record low mortgage rates could last two years

Record low mortgage rates could last two years

Five-year mortgages at 1.89 percent as Bank of Canada cut rates for a mortgage stress test for the second time this year
by: Frank O' Brien

Record low mortgage rates for homes and multi-family properties will continue for at least two years, according to the Bank of Canada (BOC) as it chopped the qualifying rate for the mortgage stress test August 14 for the second time this year.

The Bank of Canada lowered its five-year conventional mortgage rate from 4.94 percent to 4.79 percent, the second rate cut since May.

The five-year mortgage is the most popular term in Canada.

The reduction lowers the qualifying rate under the mortgage stress test – which all buyers must qualify for – but it is far above actual lending rates that have plunged to among the lowest level in Canadian history.

Buyers need to qualify at the BOC five-year rate, but they don’t have to pay it.

HSBC Canada, Canada’s seventh-largest bank, was offering a five-year, fixed rate of 1.89 percent as of August 14, available for 120 days.

The current lowest five-year rates from Canada’s big six banks as of August 14 are 2.19 percent at Royal Bank of Canada, Scotiabank and CIBC, according to RateSpy.

Mortgage brokers are offering even lower rates, with Toronto-based Butler Mortgage dangling a 1.66 percent five-year fixed-rate on mortgages of at least $300,000 with as little as 5 percent down.

In the multi-family sector – properties of at least five rental units – CMHC-insured mortgage rates were 1.57 percent for a 5-year term, and 1.91 percent for a 10-year term, for multi-family properties under $5 million, and 1.27 percent for a 5 year, and 1.61 percent for a 10-year term, for properties valued at over $5 million, noted broker Michael Lee of Mortgage Alliance on August 14.

 Lee noted the rate is set daily and some analysts believe it could fall further

“This is like free money,” said Marc Goodman of Goodman Commercial Inc. of Vancouver, which specializes in the multi-family sector.

Homebuyers can also do the math: paying a 2 percent annual mortgage rate when the national average home price is increasing at a rate of 5.4 percent annually, according to June data from the Canadian Real Estate Association, which is an incentive to buy now.

In B.C., the average home price in July was up 12.9 percent from a year earlier to $770,810, according to the BC Real Estate Association.

Further, the Bank of Canada states that lending rates will remain low for a long time.

Bank of Canada governor Tiff Macklem said in an August 14 press conference that what he wants Canadians to take away from the BOC rate cut actions is "Canadian interest rates are very low and will remain very low for a very long period."

Macklem told reporters the BOC will not raise rates until the inflation hits its 2 percent target on a sustainable basis, which he estimates will take at least two years due to a COVID-19-stunted economy.

Aug. 13, 2020

Housing Market Report for August 2020

Housing Market Report 

Current Surrey MLS® stats indicate an average house price of $850,366 and 1,477 new listings in the last 28 days. As of today, Surrey housing data shows median days on market is 22days.

July 28, 2020

How to Sell a House in BC

As the homeowner, you play a vital role in preparing your home for the market, determining your asking price, striking the deal, and handing over the role of ownership. 

 

Step 1 – Estimate your home value and cost of selling your home


The cost of selling a home can catch homeowners by surprise. A portion of your earnings will be spent on real estate agent commissions, along with an appraisal (about $400), repairs to the home, closing costs (about $500-$1,500 for sellers), moving expenses, and staging fees.

You may also face a mortgage prepayment penalty or discharge fee between $200 and $600 for paying off your mortgage early. You will need to check with your lender to see if this fee applies.

For some buyers, the cost of waiting is another thing to consider. For each month you wait to sell your home, you’re paying another month of mortgage, interest, homeowner’s insurance, and maintenance. If you’re hoping to reduce your living expenses and liability, listing your home as soon as possible may alleviate these costs.

The goal is to calculate what selling your home will cost you so you can set realistic expectations when turning a profit. Simply listing your home for more than you purchased it for doesn’t guarantee an automatic profit. You’ll need to consider how much you’re spending to determine how much you can list it for so you can do better than break even.


Step 2 – Choose how to sell your home



Home sellers might be surprised to know that not all Realtors are created equal. Not only do Realtors vary in skill in the industry; they also vary in commissions. Agent fees in Canada range from 3% to 7%, which has a major impact on how much of your home sale you walk away with.

For example, the average home value in Canada is $455,000, which means you could be paying between $13,650 and $31,850 in agent commissions alone. That’s a major difference that can quickly eat away your profits, so it’s essential to choose an agent that gives you the best value but also provides adequate service for the price you pay.

In hot markets, some homeowners skip the real estate agent commission altogether in favour of a For Sale By Owner (FSBO) approach. This means that instead of losing some of your profit to an agent, you take on their responsibilities yourself. However, homeowners don’t save as much as they expect because they still need to pay the buyer’s agent fee and the MLS listing fee. It’s also recommended to get a professional appraisal to set your listing price.

Make sure you weigh your options to see if you’re better off doing all the work yourself to save a little money vs. paying an agent to bear much of the home sale process and give you less responsibility in the process.



Step 3 – Prepare Your Property for Sale

 

If you want to attract buyers the traditional way, you’ll need a standout listing that not only talks about the number of bedrooms and bathrooms but also sells the vision of what it’s like to live in your home. Aside from home features like big closets and square footage, talk about how close you are to area amenities. Mention if you’ve just repainted or added new appliances.

Most homes are not in sell-ready condition, which means you’ll spend time and money fixing up the home for potential buyers.


Approach home repairs with caution. Some repairs and upgrades are necessary, but not all of them will add value to your home or help it sell faster.



Step 4 – Add Appeal, Inside and Out


Curb appeal makes a strong first impression. Boosting your home’s exterior with bright flowers, a new mailbox, or freshly washed walkways can set a positive tone for what the buyer will find inside.

You may also want to do a little home staging to make your home more attractive to buyers. Home staging goes beyond cleaning and painting to make your home stand out from others. Some people even go as far as renting art or furniture to create the right look. This can cost hundreds of dollars per room, so make sure you weigh the benefits carefully.


Step 5 – The Offer Process


If you receive an offer on your home, you can either accept the offer as-is, decline it, or make a counteroffer. The negotiation process is a tricky scenario as each party wants to walk away from a winner in the deal. Once both parties have reached an agreement, the offer is documented as a formal contract, and the closing process begins.


Step 6 – Prepare for the Final Transaction


While most of the tasks associated with closing are the buyer’s responsibility, homeowners also have work to do. 


Before the final closing date, you’ll need to locate important home documents, make repairs stipulated in the purchase agreement, and create the official disclosure statements. The seller is obligated by law to disclose any known latent defects in the home, such as mould infestations or other dangers. Under certain conditions, you may be required to disclose if the property has been the site of a marijuana grow operation or if there’s a stigma related to the property (e.g., a murder occurred on-site).

Courtesy: Ratehub

July 13, 2020

Virtual Tour for Unit 108, 8168 120A Street

"The Soho" Rarely available Ground level 1 Bed plus 1 Den.

✅ Prime Location ⠀
✅ Transit Friendly ⠀
✅ Low Strata Fee ⠀
✅ Rentals Allowed ⠀
Spacious layout boasts impressive features that include kitchen upgrades, new floors, stainless steel appliances, custom cabinets in master bedroom, walk out patio and more. ⠀
Centrally located by all levels of schools, transit, hwy access, shopping, and restaurants. Don't miss out on this affordable opportunity. ⠀
Listed for $390,000 ⠀
Looking to buy or sell in this market ? Get in touch today for top notch service
and honest advise.
Raj Batra ⠀
778.829.2300⠀
BatraHomes.ca
July 3, 2020

NEWS FLASH: STATS, JUNE 2020

Steady increases in home sale and listing activity continue in June

Home buyers and sellers have gradually become more active in each month of the COVID-19 pandemic. In June, home sale and listing activity in Metro Vancouver* returned to more historically typical levels.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region totalled 2,443 in June 2020, a 17.6 per cent increase from the 2,077 sales recorded in June 2019, and a 64.5 per cent increase from the 1,485 homes sold in May 2020.

Last month’s sales were 21.9 per cent below the 10-year June sales average.

“REALTORS® continue to optimize new technology tools and practices to help their clients meet their housing needs in a safe and responsible way,” Colette Gerber, REBGV Chair said “Over the last three months, home buyers and sellers have become more comfortable operating within the physical distancing and other safety protocols in place.”

There were 5,787 detached, attached and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in June 2020. This represents a 21.8 per cent increase compared to the 4,751 homes listed in June 2019 and a 57.1 per cent increase compared to May 2020 when 3,684 homes were listed.

The total number of homes currently listed for sale on the MLS® system in Metro Vancouver is 11,424, a 23.7 per cent decrease compared to June 2019 (14,968) and a 15.1 per cent increase compared to May 2020 (9,927).

“Much more of the real estate transaction is happening virtually today. Before considering an in-person showing, REALTORS® are helping potential buyers pre-screen homes more thoroughly by taking video tours, reviewing floorpans and an increased number of high-resolution images, as well as often driving through the neighbourhood.”

For all property types, the sales-to-active listings ratio for June 2020 is 21.4 per cent. By property type, the ratio is 19.9 per cent for detached homes, 25.2 per cent for townhomes, and 21.3 per cent for apartments.

Generally, analysts say downward pressure on home prices occurs when the ratio dips below 12 per cent for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.

“Home prices have remained steady with minimal fluctuation over the last few months,” Gerber said. “With increasing demand, REALTORS® have begun seeing multiple offers for homes priced competitively for today’s market.”

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $1,025,300. This represents a 3.5 per cent increase over June 2019 and a 0.3 per cent decrease compared to May 2020.

Sales of detached homes in June 2020 reached 866, a 16.1 per cent increase from the 746 detached sales recorded in June 2019. The benchmark price for a detached home is $1,464,200. This represents a 3.6 per cent increase from June 2019 and a 0.5 per cent increase compared to May 2020.

Sales of apartment homes reached 1,105 in June 2020, a 17.4 per cent increase compared to the 941 sales in June 2019. The benchmark price of an apartment property is $680,800. This represents a 3.6 per cent increase from June 2019 and a 0.8 per cent decrease compared to May 2020.

Attached home sales in June 2020 totalled 472, a 21 per cent increase compared to the 390 sales in June 2019. The benchmark price of an attached home is $790,800.

This represents a 2.3 per cent increase from June 2019 and a 0.2 per cent decrease compared to May 2020.

Call or Text me anytime if you have any questions about your local market. 

Raj Batra 
778.829.2300
C21 AAA Realty