By Amy Fontinelle | Investopedia – Tue, 20 Mar, 2012


Before you buy a home, one of the things you should do is to have the home checked out by a professional home

inspector. Buying a home is expensive enough as it is - why would you choose to fork over another $400 if you're

not required to? In this article, we'll delve into what a home inspection can reveal and why you shouldn't forgo this

optional procedure.

The Home Inspection Contingency
Your first clue that a home inspection is important is that it can be used as a contingency in your purchase offer.

This contingency provides that if significant defects are revealed by a home inspection, you can back out of your

offer, free of penalty, within a certain timeframe. The potential problems a home can have must be pretty serious if

they could allow you to walk away from such a significant contract. 

What a Home Inspection Examines
Inspectors vary in experience, ability and thoroughness, but a good inspector should examine certain components

of the home you want to purchase and then produce a report covering his or her findings. The typical inspection

lasts two to three hours and you should be present for the inspection to get a firsthand explanation of the

inspector's findings and, if necessary, ask questions. Also, any problems the inspector uncovers will make more

sense if you see them in person instead of relying solely on the snapshot photos in the report.


The inspector should note: 

  • whether each problem is a safety issue, major defect, or minor defect
  • which items need replacement and which should be repaired or serviced
  • items that are suitable for now but that should be monitored closely

A really great inspector will even tell you about routine maintenance that should be performed, which can be a

great help if you are a first-time homebuyer

While it is impossible to list everything an inspector could possibly check for, the following list will give you a

general idea of what to expect.



  • Exterior walls - The inspector will check for damaged or missing siding, cracks and whether the soil is in excessively close contact with the bottom of the house, which can invite wood-destroying insects. However, the pest inspector, not the home inspector, will check for actual damage from these insects. The inspector will let you know which problems are cosmetic and which could be more serious.
  • Foundation - If the foundation is not visible, and it usually is not, the inspector will not be able to examine it directly, but they can check for secondary evidence of foundation issues, like cracks or settling.
  • Grading - The inspector will let you know whether the grading slopes away from the house as it should. If it doesn't, water could get into the house and cause damage, and you will need to either change the slope of the yard or install a drainage system.
  • Garage or carport - The inspector will test the garage door for proper opening and closing, check the garage framing if it is visible and determine if the garage is properly ventilated (to prevent accidental carbon monoxide poisoning). If the water heater is in the garage, the inspector will make sure it is installed high enough off the ground to minimize the risk of explosion from gasoline fumes mingling with the heater's flame.
  • Roof - The inspector will check for areas where roof damage or poor installation could allow water to enter the home, such as loose, missing or improperly secured shingles and cracked or damaged mastic around vents. He or she will also check the condition of the gutters.


  • Plumbing - The home inspector will check all faucets and showers, look for visible leaks, such as under sinks and test the water pressure. He or she will also identify the kind of pipes the house has, if any pipes are visible. The inspector may recommend a secondary inspection if the pipes are old to determine if or when they might need to be replaced and how much the work would cost. The inspector will also identify the location of the home's main water shutoff valve.
  • Electrical - The inspector will identify the kind of wiring the home has, test all the outlets and make sure there are functional ground fault circuit interrupters (which can protect you from electrocution, electric shock and electrical burns) installed in areas like the bathrooms, kitchen, garage and outdoors. They will also check your electrical panel for any safety issues and check your electrical outlets to make sure they do not present a fire hazard.
  • Heating, ventilation and air conditioning (HVAC) - The inspector will look at your HVAC system to estimate the age of the furnace and air conditioner, determine if they function properly and recommend repairs or maintenance. An inspector can also give you an idea of the age of the home's ducting, whether it might have leaks, if your home has sufficient insulation to minimize your energy bills and whether there is any asbestos insulation.
  • Water heater - The home inspector will identify the age of the heater and determine if it is properly installed and secured. The inspector will also let you know what kind of condition it is in and give you a general idea of how many years it has left.
  • Kitchen appliances – The inspector will sometimes check kitchen appliances that come with the home to make sure they work, but these are not always part of the inspection. Be sure to ask the inspector which appliances are not included so that you can check them yourself.
  • Laundry room - The inspector will make sure the laundry room is properly vented. A poorly maintained dryer-exhaust system can be a serious fire hazard.
  • Fire safety - If the home has an attached garage, the inspector will make sure the wall has the proper fire rating and that it hasn't been damaged in any way that would compromise its fire rating. They will also test the home's smoke detectors.
  • Bathrooms - The inspector will check for visible leaks, properly secured toilets, adequate ventilation and other issues. If the bathroom does not have a window and/or a ventilation fan, mold and mildew can become problems and moisture can warp wood cabinets over time.

Home Inspection Shortcomings
A home inspection can't identify everything that might be wrong with the property - it only checks for visual cues to

problems. For example, if the home's doors do not close properly or the floors are slanted, the foundation might

have a crack - but if the crack can't be seen without pulling up all the flooring in the house, a home inspector can't

tell you for sure if it's there.


Furthermore, most home inspectors are generalists - that is, they can tell you that the plumbing might have a

problem, but then they will recommend that you hire an expert to verify the problem and give you an estimate of the

cost to fix it. Of course, hiring additional inspectors will cost extra money. Home inspectors also do not check for

issues like termite damage, site contamination, mold, engineering problems and other specialized issues.


SEE: 10 Reasons You Shouldn't Skip A Home Inspection

After the Inspection
Once you have the results of your home inspection, you have several options. 

  • If the problems are too significant or too expensive to fix, you can choose to walk away from the purchase, as long as the purchase contract has an inspection contingency.
  • For problems large or small, you can ask the seller to fix them, reduce the purchase price, or to give you a cash credit at closing to fix the problems yourself - this is where a home inspection can pay for itself several times over.
  • If these options aren't viable in your situation (for example, if the property is bank-owned and being sold as-is), you can get estimates to fix the problems yourself and come up with a plan for repairs in order of their importance and affordability once you own the property.

The Bottom Line
A home inspection will cost you a little bit of time and money, but in the long run you'll be glad you did it. The

inspection can reveal problems that you may be able to get the current owners to fix before you move in, saving

you time and money. If you are a first-time homebuyer, an inspection can give you a crash course in home

maintenance and a checklist of items that need attention to make your home as safe and sound as possible.

Don't skip this important step in the home-buying process - it's worth every penny.


Royal Bank raises mortgage rates on both fixed and variable types


By The Canadian Press


TORONTO - Royal Bank (TSX:RY.TO - News) is raising its posted fixed and variable mortgage rates, of between 10

and 50 basis points in a sign the era of ultra low borrowing could be drawing to a close.


The Toronto-based lender said its posted five-year closed mortgage rates will move up 20 basis points to 5.44 per

cent effective Mar. 29, while bank's special fixed rate offer on a four-year fixed rate will add 50 basis points to 3.49.


Meanwhile, the posted five-year variable rate — which rises or falls along with the bank's prime lending rate — will

rise 10 basis points to prime plus 0.20 percentage points.


The prime rate, which usually moves with the Bank of Canada's key interest rate, is currently three per cent.


The moves come after a recent race to the bottom that recently saw Royal and others push their special offer fixed

rate down to 2.99 per cent.


Although variable rates usually follow the lead of the Bank of Canada, longer-term rates are more influenced by

bonds. Higher bond yields increase the cost of funds for lenders, who in turn pass them on to customers.


Government of Canada five-year bond yields have jumped more than 50 basis points in the past three months



The other banks could soon follow RBC's move in raising rates as the big five Canadian banks often move in



In a BMO report Friday, its economists argued that with the U.S. recovering gathering steam, central bankers on

both sides of the border are becoming more comfortable with the economy and less so with historically low

interest rates that in Canada are fanning the flames of the hot housing market.


Both Finance Minister Jim Flaherty and Bank of Governor Mark Carney have recently flagged household debt at a

danger to the economy.


Household debt to disposable annual income is above 150 per cent.


Mortgage war means good news for homeowners



By Gordon Pape | Moneyville


Good news! The mortgage wars are back. Bad news! The mortgage wars are back. It all depends on your



If you’re an aspiring homeowner or you want to refinance to pay off back-breaking credit card debt, the latest battle

of the banks for market share is a terrific opportunity.


If you’re Bank of Canada Governor Mark Carney, it’s a slap in the face. You’re the most influential financial person

in the country and you’ve been spending a lot of time during the past two years warning Canadians about the

dangers of their ever-increasing debt levels. And what is the banking oligarchy doing in response? Thumbing their

collective noses at you by encouraging people to take on even more debt!


The latest cat fight for mortgage market share couldn’t have come at a better time for prospective borrowers. The

spring housing season is just starting to heat up and prices stubbornly continue at record highs despite alarm

bells that the bubble could burst any time soon. In this climate, any break on mortgage rates that makes your

dream home more affordable is welcome.


The mortgage market is a Wild West show right now. The banks are aggressively undercutting one another to

build their business before the low-interest window closes. Bank of Montreal kicked off the latest round of rate-

cutting by offering a five-year closed mortgage at 2.99 per cent and an even more eye-popping 10-year rate of 3.99

per cent.


Royal Bank has countered with an “all the frills” four-year fixed rate of 2.99 per cent with amortizations up to 30

years. That translates into a monthly payment of $1,260 on a $300,000 loan. By comparison, at 5 per cent the

monthly carrying cost would be just over $1,600. Royal even offers to pay the switching costs if you move your

business from another financial institution. Talk about dog-eat-dog!


Most other banks are offering similar deals just to stay in the game. For the moment, this is a true buyer’s market

for borrowers but it may not last long. Some of the deals have fixed termination dates (e.g. March 28 for BMO’s 10-

year 3.99 per cent rate). Others could be pulled at any time.


Meanwhile, in Ottawa, Carney must be seething. The last thing he wants to see is Canadians jacking up their

household debt to income ratios even more. But short of intervening directly in the private sector, which he would

be reluctant to do except under extreme circumstances, his hands are pretty much tied.


He’d love to raise the key overnight target rate from its current level of 1 per cent but for the moment he’s a

prisoner of the domestic economy and international forces. The recovery is still fragile and the high loonie

continues to hurt our export markets. Still, you can bet he’ll make a move at the first possible opportunity.


Do you remember in high school when your English teacher would make you parse lines from Shakespeare?

That’s what economists do when the Bank of Canada issues its interest rate statements. They dissect every line,

looking for clues that indicate any subtle shifts in position that might suggest a move up or down in the near future.

They found several such clues in the March 8 announcement that the overnight rate would remain unchanged for



“The heightened uncertainty around the global economic outlook has decreased in the weeks since the Bank

released its January Monetary Policy Report (MPR),” the statement said. “With tentative signs of stabilization in

European bank funding and sovereign debt markets, conditions in global financial markets have improved and

risk aversion has decreased.”


Reduced global uncertainty. Signs of stability in Europe. Global financial markets looking better. Less risk

aversion. Hmm.


The statement went on: “Canadian household spending is expected to remain high relative to GDP as

households add to their debt burden, which remains the biggest domestic risk.”


It doesn’t take an economist to read between the lines here. With the global economy improving and household

debt “the biggest domestic risk” interest rate increases are on the way sooner rather than later.


The U.S. Federal Reserve Board’s pledge to hold its rates at record lows until 2014 is a problem because it

means a Canadian rate increase will probably push the loonie even higher. But Carney may be prepared to live

with that to try to shake the country out of its debt spiral.


So if you are thinking about borrowing money, my advice is to act now. The window may be closing faster than you

think. And here’s another tip. Take the longest low-rate option you can find. You may not see anything like it again

in your lifetime.


Is it time to lock-in your mortgage? Bank of Montreal economists say yes



By Julian Beltrame, The Canadian Press


OTTAWA - The days of super-low mortgage rates that made home ownership dreams a reality of many Canadians

may be numbered, says the Bank of Montreal.


The bank's advice? Say goodbye to variable mortgages and lock in longer-term fixed rates while the going is still



In a report released Friday, BMO economists Douglas Porter and Benjamin Reitzes argue that with the U.S.

recovering gathering steam, central bankers on both sides of the border are becoming more comfortable with the

economy and less so with historically depressed interest rates that in Canada are fanning the flames of the hot

housing market.


Already, financial markets have priced in a close to 50 per cent chance that Bank of Canada governor Mark Carney

will start hiking his one per cent policy setting before the year's end, they note.


"We just believe the tide on some of these longer-term interest rates is beginning to turn," explained Porter, the

bank's deputy chief economist.


"You can get a five-year rate for 2.99 per cent. Today's inflation rate was 2.6 per cent; that's almost unheard of that

you can borrow for basically the cost of inflation. I don't believe it's sustainable."


Both Finance Minister Jim Flaherty and Carney have recently flagged the danger to the economy of Canadians

becoming increasingly indebted, mostly through taking advantage of low rates to buy homes or take out home

equity loans. Household debt to disposable annual income is above 150 per cent and likely to rise further toward

the 160 per cent level that preceded the housing collapse in the U.S., say analysts.


This week, Flaherty expressed some exasperation that banks are calling on him to stop them from making loans

that Canadians may not be able to afford once rates start rising.


And both the Canada Mortgage and Housing Corporation, and the Office of Superintendent for Financial

Institutions issued documents suggesting debt tolerance is being tested.


The BMO economists concede that variable rates have been the best option most of the time. Their report says

variable has been the cost-effective route 84 per cent of the time since 1975.


"But recent rate competition has all but erased the spread between the five-year fixed mortgage rates and variable

rates," they add.


"The bond market, in particular, is sending loud warning signals that the era of low interest rates may finally be

drawing to a close. Government of Canada five-year bond yields have jumped more than 50 basis points in the

past three months alone."


Porter notes that although variable rates usually follow the lead of the Bank of Canada, longer-term rates are more

influenced by bonds. Higher bond yields increase the cost of funds for lenders, who in turn pass them on to



"So even if variable rates take some time to climb, we may not see such low fixed rates again any time soon," he



In fact, the "special offer" 2.99 per cent five-year rate offered by many banks are due be withdrawn next Thursday.


The report offers several reasons for locking in, including that householders will attain certainty on how much they

will be paying for five years, without worrying what will happen to interest rates.


The case of staying with a variable mortgage is that historically it has saved borrowers money, and given that

inflation is tame, interest rates are unlikely to rise rapidly.


When they do, however, today's low fixed rates are unlikely to be available, say the economists.


"Our interest rate outlook now projects a significant advantage to choosing a fixed rate," they conclude. "While the

decision still depends on the individual, a low rate combined with a shorter 25-year amortization would

significantly strengthen a borrower's financial stability."


Top 25 grants and rebates for property buyers and owners

The Westmar Team at Macdonald Realty is pleased to provide you with a list of resources with links to rebates 

and grants available to both residential homeowners and commercial property owners in the Lower Mainland. 

Many of the programs are available to anyone, and several that offer big savings on “green” products and 



1. Home Buyers' Plan

Qualifying home buyers can withdraw up to $25,000 (couples can withdraw up to $50,000) from their RRSPs for

a down payment. Home buyers who have repaid their RRSP may be eligible to use the program a second time.


Canada Revenue Agency - Enter 'Home Buyers' Plan' in the search box. 1.800.959.8287


2. GST Rebate on New Homes

New home buyers can apply for a rebate of the federal portion of the HST (the 5% GST) if the purchase price is

less than $350,000. The rebate is up to 36% of the GST to a maximum rebate of $6,300. There is a proportional

GST rebate for new homes costing between $350,000 and $450,000.

Canada Revenue Agency - Enter 'RC4028' in the search box. 1.800.959.8287

3. BC New Housing Rebate (HST)

Effective April 1, 2012, the BC HST new housing rebate threshold will be increased to $850,000, for a rebate of

up to $42,000 on newly built homes (an increase of 60% over the previous rebate). Purchasers of new 

secondary or recreational homes outside the Greater Vancouver and Capital regional districts priced up to 

$850,000 are now eligible to claim a provincial grant of up to $42,500 (effective April 1, 2012). 1.800.959.8287

4. BC First-Time New Home Buyers Bonus (NEW!)

Effective February 21, 2012 to March 31, 2013, The BC government is implementing a temporary one-time 

refundable personal income tax credit worth up to $10,000. Visit the website below or call for more details and 



5. BC New Rental Housing Rebate (HST)(UPDATED!)

Effective April 1, 2012, landlords buying new or substantially renovated housing are eligible for a rebate of 

71.43% of the provincial portion of the HST, up to $42,500 per unit. 1.800.959.8287

6. BC Property Transfer Tax (PTT) First Time Home Buyers' Program

Qualifying first-time buyers may be exempt from paying the PTT of 1% on the first $200,000 and 2% on the

remainder of the purchase price of a home priced up to $425,000. There is a proportional exemption for

homes priced up to $450,000.

BC Ministry of Small Business and Revenue: 250.387.0604

7. First-Time Home Buyers' Tax Credit (HBTC)

This federal non-refundable income tax credit is for qualifying buyers of detached, attached, apartment 

condominiums, mobile homes or shares in a cooperative housing corporation. The calculation: multiply the 

lowest personal income tax rate for the year (15% in 2011) x $5,000. For the 2011 tax year, the maximum 

credit is $750. 1.800.959.8281

8. BC Home Owner Grant

Reduces property taxes for home owners with an assessed value of up to $1,285,000. The basic grant gives

home owners:

- a maximum reduction of $570 in property taxes on principal residences in the Capital, Greater Vancouver 

and Fraser Valley regional districts;


- an additional grant of $770 to rural homeowners elsewhere in the province; and


- an additional grant of $275 to seniors aged 65+, those who are permanently disabled and war veterans of 

certain wars.

BC Ministry of Small Business and Revenue or contact your municipal tax office.

9. BC Property Tax Deferment Programs

- Property Tax Deferment Program for seniors. Qualifying home owners aged 55+ may be eligible to defer 

property taxes.


- Financial Hardship Property Tax Deferment Program. Qualifying low-income home owners may be eligible to

defer property taxes.


- Property Tax Deferment Program for Families with Children. Qualifying low income home owners who

financially support children under age 18 may be eligible to defer property taxes.

10. Canada Mortgage and Housing (CMHC) Residential Rehabilitation Assistance Program (RRAP)Grants.

This federal program provides financial aid to qualifying low-income home owners to repair substandard 

housing. Eligible repairs include heating, structural, electrical, plumbing and fire safety. Grants are available

for seniors, persons with disabilities, owners of rental properties and owners creating secondary and garden

suites. 1.800.668.2642 604.873.7408

11. CMHC Mortgage Loan Insurance Premium Refund

Provides home buyers with CMHC mortgage insurance, a 10% premium refund and possible extended

amortization without surcharge when buyers purchase an energy efficient mortgage or make energy saving 

renovations. 604.731.5733

12. Energy Saving Mortgages

Financial institutions offer a range of mortgages to home buyers and owners who make their homes more 

energy efficient. For example, home owners who have a home energy audit within 90 days of receiving an 

RBC Energy SaverT Mortgage may qualify for a rebate of $300 to their RBC account. 1.800.769.2511

13. Low Interest Renovation Loans

Financial institutions offer 'green' loans for home owners making energy efficient upgrades. Vancity's Bright

Ideas personal loan offers home owners up to $20,000 at prime + 1% for up to 10 years for 'green' 

renovations. RBC's Energy Saver loan offers 1% off the interest rate for a fixed rate installment loan over

$5,000 or a $100 rebate on a home energy audit on a fixed rate installment loan over $5,000.

For information visit your financial institution. and

14. LiveSmart BC: Efficiency Incentive Program

Home owners improving the energy efficiency of their homes may qualify for cash incentives through this

provincial program provided in partnership with BC Hydro and FortisBC. Rebates are for energy efficient 

products which replace gas and oil furnaces, pumps, water heaters, wood stoves, insulation, windows, doors,

skylights and more. The LiveSmart BC program also covers $150 of the cost of a home energy assessment, 

directly to the service provider. 1.866.430.8765

15. BC Residential Energy Credit

Home owners and residential landlords buying heating fuel receive a BC government point-of-sale rebate on 

utility bills equal to the provincial component of the HST. 1.877.388.4440

16. BC Hydro Appliance Rebates

Mail-in rebates for purchasers of ENERGY STAR clothes washers, refrigerators, dishwashers, or freezers. 1.800.224.9376

17. BC Hydro Fridge Buy-Back Program

This ongoing program rebates BC Hydro customers $30 to turn in spare fridges in working condition. 604.881.4357

18. BC Hydro Windows Rebate Program

Pay no HST when you buy ENERGY STAR high-performance windows and doors. 604.759.2759 for a free in-home 


19. BC Hydro Mail-in Rebates/Savings Coupons

To save energy, BC Hydro offers rebates including 40% off energy saving toilets, 30%off water heater

insulation blankets, and more. Check for new offers and for deadlines. 1.800.224.9376

20. FortisBC Rebate Program

A range of rebates for home owners include a $75 rebate on select ENERGY STAR clothes washers, $300

rebate on an EnerChoice fireplace and a $1,000 rebate for switching to natural gas (from oil or propane) 

and installing an ENERGY STAR heating system. Check for current offers. 1.888.224.2710

21. FortisBC Efficient Boiler Program

For commercial buildings, provides a cash rebate of up to 75% of the purchase price of an energy efficient 

boiler, for new construction or retrofits. Also receive a rebate of up to $15,000 on select commercial water 

heaters. 1.888.477.0777

22. City of Vancouver Rain Barrel Subsidy Program

The City of Vancouver provides a subsidy of 50% of the cost of a rain barrel for Vancouver residents. With the

subsidy, the rain barrel costs $75. Buy your rain barrel at the Transfer Station at 377 W. North Kent Ave., 

Vancouver, BC. Limit of two per household. Bring proof of residency. Dial 311 in Vancouver or 

604.873.7000 outside Vancouver city limits. Other municipalities have similar offers.

Richmond offers rain barrels to residents for $20 for 45 or 50 gallon units, with downspout diverters available 

for $16. Available from Richmond Recycling Depot at 5555 Lynas Lane, Richmond, BC. Limited supplies.

23. City of Vancouver Greenest City 2020 Pilot Home Energy Loan Program

The City of Vancouver in cooperation with Vancity, FortisBC, BC Hydro and Natural Resources Canada offers 

access to loans for energy retrofits including heating systems, insulation and air sealing. The Home Energy 

Loan from Vancity is a 12month pilot program that will end October 21, 2012. For more information attend a 

workshop (see third link below). The goal is 500 homes and loans are offered at 4.5% fixed rate over 10 

years. The program also helps with accessing grants from the federal ecoENERGY program, the provincial 

LiveSmart BC program and FortisBC. and and

Email: 604.374.0507

24. Local Government Water Conservation Incentives

Your municipality may provide grants and incentives to residents to help save water. For example, the City 

of Coquitlam and Richmond offers residents a $100 rebate, and the City of North Vancouver, District of North

Vancouver, and District of West Vancouver offer a $50 rebate when residents install a low-flush toilet. Visit 

your municipality's website and enter 'toilet rebate' to see if there is a program.

Richmond rebate: 604.276.4179

25. Local Government Water Meter Programs

Your municipality may provide a program for voluntary water metering, so that you pay only for the amount 

of water that you use. Delta, Richmond and Surrey have programs and other municipalities may soon follow. 

Visit your municipality's website and enter 'water meter' to find out if there is a program.

Richmond info: 604.271.9700


There are few milestones more important for a couple than buying a home together, and the amount research and paperwork involved can be daunting.



 By Lauren Krugel, The Canadian Press


CALGARY - There are few milestones more important for a couple than buying a home together, and the amount

of research and paperwork involved can be daunting.


That's what Nicole Simone and her partner Mike Wilson are discovering as they scour Toronto's west end for the

perfect home.


Simone, a 25-year-old government worker, figures house hunting accounts for 90 per cent of what she and Wilson

talk about these days.


"And if you don't just keep a good sense of humour about it, you're not going to get through it," she said.


The duo was disappointed to lose a bidding war for a house in the Etobicoke area of Toronto, but the quest must



"It just wasn't meant to be, so we kind of just have to let it go and keep in mind the kinds of things we liked about

that place, and hopefully we find some things better and cheaper," Simone said.


The journey usually starts with a meeting at the bank to get a pre-approval for a mortgage, a step that Simone and

Wilson took in October.


TD Canada Trust mortgage specialist Jessy Bilodeau says the lender sifts through a client's financial history

before approving a loan so, if there are any skeletons in the closet, it's best to let them out right away.


It's best for the clients to alert the mortgage specialist of possible issues before they meet so there's no

surprises, she says.


"We can tell them what documents we're going to need, and they can bring them along with them to that first



No issues came up when Simone and Wilson had the money talk. They were aware Simone still carried a lot of

student debt, and she was "pleasantly surprised" to find out how much Wilson had in his savings account.


"We're both very comfortable with sharing our finances," said Wilson.


It's not just the mortgage payments couples have to worry about, says Bill Briggs, a Re/Max broker-owner in



"A lot of them don't understand the cash commitments that are going to be necessary," he said.


Those may include a down payment, moving expenses, insurance, utilities, condo maintenance fees and taxes.

Some repairs may be necessary as well and new owners usually want to do at least some redecorating and



Vancouver-area Re/Max realtor Lynda Terborg recommends first-time homebuyers "practice" ahead of time.


Work out how much the mortgage and other expenses are going amount to and sock it away. Then that sum can

go toward home decorating, for example, and the couple will know what to expect when they own a home for real.


"It's going to be a little more than what you're paying now renting or living at home with mom and dad," she said.


For a double-income household, normally one of those incomes goes toward housing costs alone, said Terborg.

"You can follow that formula. It's a hard one to swallow, but that's the reality."


Couples may be gung-ho about shopping for properties as soon as they've lined up their mortgage, but Re/Max

realtor Frank Rudge, based in Victoria, said it's important to have a long talk with an agent before the hunt begins.


He said he often tells clients not to rush, and also have a meeting to discuss their needs and interests.


"Let me help you make that right decision rather than 'I'm going to quickly sell you something before you go and

buy from somebody else' and before you make a snap decision," he said.


There are some things a potential homebuyer may not be aware of — like that some condo buildings have age

restrictions, and may not be worth buying if starting a family is in the cards.


Real estate agents say it's also important to keep an open mind. Sometimes what people want going in to the

process isn't what they wind up with.


Simone and Wilson, for instance, started looking at condos, but realized after a while a house may give them

more bang for their buck. They've also widened their target area, looking at parts of Etobicoke they hadn't in the



"I would argue we probably wasted a good three months on looking at condos. We've probably seen over 50

condos, and that was a whole waste of time — pretty much spending every Saturday going to see five or six

condos," said Wilson, a 26-year-old who works at an engineering firm.


Their real estate agent — a woman who is only a few years older than them — has been a huge help, he said.

"I think she really can relate to us, as we're first-time home buyers. She knows what we're looking for and our

expectations and our needs," said Wilson.


"I think being with a real estate agent that gets you is really key," added Simone. "And we lucked out."


Vancouver to open rent bank for vulnerable residents 

One-time loans aimed at preventing homelessness 


The City of Vancouver announced a three-year commitment today to help fund a rent bank that will provide emergency loans for low-income citizens in danger of eviction.


The rent bank will provide one-time loans to employed renters whose housing is threatened by financial



"The rent bank will help people get over the hump," said Coun. Kerry Jang.


"We don't want families in desperate need to be choosing between paying rent and buying food."


Loans will be given for rents or housing-related costs in arrears, such as utility bills, and could help an estimated

540 people in the coming three years.


The loans are designed for singles, couples and families who may be living paycheque to paycheque and find

themselves in financial crisis.


Applicants must show need, and demonstrate that they have a viable means for repayment over a two-year period.


Recipients must participate in a financial literacy course to help them budget and prevent future need.


The need for a rent bank was identified in the city's 2011 homeless and housing plan, said Jang.


"That showed there were a huge number of people in Vancouver that were at risk. You have to prevent people from

becoming homeless in the first place."


The city is providing $148,800 over three years toward the Vancouver Rent Bank's operating costs. Streetohome

Foundation is providing $551,000 over three years, and additional funds will be provided by the Vancouver

Foundation and the Vancity Community Foundation.


Dick Vollet, CEO of Streeto-home, said the rent bank is an important strategy in homelessness prevention. Similar

programs have operated successfully, with high repayment rates, in Toronto, Surrey, Prince George and the

Fraser Valley.


The cost of eviction, losing housing and housing home-less people over time is much greater than the cost of a

repay-able rent bank loan that can keep people in their homes, said Vollet.


The Network of Inner City Community Services will administer the Vancouver Rent Bank. The organization will be

accepting applications for loans beginning in August 2012.



Another example of Vancouver's crazy real estate market


VANCOUVER (NEWS1130) - It's just another example of how ridiculous Vancouver's real estate
market is.

Four hundred units at the newMarine Gateway Development in South Vancouver sold in just four
hours over the weekend. But planning consultant Michael Gellerhas a few concerns. 

"This development, I don't think, is going to be meeting the needs of so many young couples in
Vancouver looking to buy their first home or people who want to sell a house and stay in the

He says most of these units aren't going to people who actually need a roof over their heads.

"These are not usually couples buying their first home with their life-savings," explains Geller.
"They're people who are willing to put down a few thousand dollars and 20 per cent over time as
an investment."

Geller adds when projects sell out in a matter of hours like this, it's usually investors driving the
sales. He believes investors may eventually put their units up for rent, but the project at the
Marine Drive Canada Line station includes mostly smaller apartments.

The development should break ground this May. The finished project will consist of two residential
towers and an office tower that will be built on top of a 'retail podium'.

The podium will include a 1,940-seat movie theatre, a grocery store, restaurants, and retail space
to accompany the condo towers, all situated next to the Marine Drive Canada Line SkyTrain station.

Marine Gateway is the first major development along the Vancouver portion of the Canada Line,
and the largest project outside Vancouver's downtown core

What Canadians need to know about buying U.S. real estate

  Mar 16, 2012 – 12:59 PM ET


Jacob Kepler/Bloomberg News


The financial crisis that began in 2007 with the breakdown of the U.S. residential mortgage market still persists for

millions of Americans who have lost their houses, their jobs and all hope of a secure retirement.


As a result, residential real estate prices in the hardest-hit areas such as California, Arizona, Nevada and Florida

are well below replacement value (i.e., the land is valued at zero), leading many analysts to conclude that prices

must be near, if not already at, the bottom.


At the same time, the Canadian dollar remains very strong against the U.S. dollar. Any investment in U.S. assets

is likely to provide a decent return over time based on foreign exchange gains alone.


Taken together, these facts seem to suggest that Canadians have a once-in-a-lifetime opportunity: To buy U.S.

real estate in desirable locations at historically low prices using cheap U.S. dollars. Seems like a slam dunk,

right? Maybe. But there are a number of factors to consider before pulling out your cheque book and booking

a flight.


If you have always wanted a vacation home in the sun and are planning to buy a property that you will use yourself,

then this seems like the perfect time to buy. In addition to enjoying your new home for years to come, it is more

than likely that it will appreciate in value during that time.


If you are approaching the opportunity strictly as an investor, with the basic plan of buy-rent-sell, then consider the



1. There is no such thing as passive real estate investing

You want to buy the right property in the right neighborhood on the right street. This requires local knowledge.

Additionally, since your model requires that you rent out the property while you wait for the expected increase in

value, you will need professional property management to keep the property occupied and problem-free.


2. Canadians have a very hard time accessing financing in the U.S.

If your model requires any amount of leverage, it probably won’t work. Although mortgages are cheaper than ever,

you may not qualify for a mortgage from an American lender. Having to come up with the full purchase price will

significantly lower your long-term returns.


3. Taxes, taxes, taxes

Unless you are already a seasoned investor down south, you may be exposing yourself to various U.S. taxes by

buying and renting out an income property. The cost and hassle of having to file a U.S. tax return alone is a

disincentive. So, too, are the potential complications for your estate if you die while owning real estate in the U.S.


4. Lack of diversification can spell disaster

Anything can happen with a single piece of rental real estate. Deadbeat tenants can kill your yield. Uninsured

damages can increase your costs. And simply buying on the wrong street can mean that your returns are lower

than anticipated.


Our firm subscribes completely to the view that a great opportunity now exists to buy U.S. residential real estate

and reap significant rewards with moderate risk over the mid-to-long term.


Rather than trying to execute on the opportunity directly, however, we are studying a number of Canadian-based

investment funds that purport to provide the gains that U.S. real estate investing may create, while mitigating most

of the problems described above.


These funds enlist professional managers to buy, rent and sell their assets, and are designed to reduce the

headaches of cross-border investing from a tax perspective and reduce property-specific risk by providing

investors instant diversification.


Now the challenge is to conduct due diligence to discover which plan and which managers are best suited to

capitalize on the opportunity that exists. Once we do, we hope to be investing in U.S. real estate the smart way.


$10k home-buyer bonus sure to spur first-timers: mortgage expert


Vancity mortgage development manager Ryan McKinley (left) works with account manager Jayashrii Marapon at the company's Vancity Centre community branch in Vancouver, BC, in March 2012.

Vancity mortgage development manager Ryan McKinley (left) works with account manager Jayashrii Marapon at the company's Vancity Centre community branch in Vancouver, BC, in March 2012. 
Photograph by: Jason Payne , PNG

The new $10,000 bonus for first-time buyers of new homes will likely help a lot of potential buyers make the leap

into the real estate market, a mortgage expert says.


Ryan McKinley, mortgage development manager at Vancity, said he’s had a lot of calls from buyers seeking to

understand the bonus, but no one who has yet bought a home because of it.


“Mortgages have been top of mind for many people lately, and the calls that I’ve been getting have been in regard

to clarity — what this is, and can they take advantage of it,” McKinley said. “Spring tends to be a popular buying



The bonus, a one-time refundable personal tax credit, equal to five per cent of the purchase price of a home to a

maximum of $10,000, was announced last month in the provincial budget. The bonus is still subject to legislation,

which is expected to be introduced sometime this spring.


“I think it’s fantastic,” McKinley said. “I think it will definitely make it easier for people to get into the real estate

market and if they’re thinking about it, that might be the deciding factor.”


He said because the $10,000 will come directly to purchasers in the form of a cheque, it will be possible to apply it

in several different ways. Someone could take a loan from their parents or a line of credit from a bank to make a

down payment, then repay it when the bonus comes through.


“At Vancity, we do offer the option to, with qualification, use the $10,000 now and pay it back when you get the

rebate,” McKinley said, but added the borrower would still need enough income to qualify for the loan.


“The majority of our members would qualify for that,” McKinley said. “There would be some interest charges, so

we would need to go over that with any members considering this.”


Another option would be to take the $10,000 and use it to pay down the mortgage.


“You would save $17,000 and 2.5 years on your mortgage if you used the $10,000 rebate on a $200,000 mortgage

at 3.5 per cent over 30 years,” McKinley said. “But you have to ensure that your institution allows prepayment

privileges to do that. I would advise people to call up their branch or mortgage professional to go over how much

they can save — it’s a very quick calculation.”


To qualify for a $200,000 mortgage, which would require a $10,000 down payment and qualify for the maximum

$10,000 bonus, a person would need to earn about $42,000 a year, McKinley said. He used the same 30-year

amortization and 3.5-per-cent interest rate to calculate the $895.30 monthly payment such a mortgage would

require. McKinley said there would be about $330 a month on top of the mortgage payment for property taxes, heat

and strata fees.


“A lot of people are surprised at how much they can afford when they actually sit down with someone,” McKinley



Another option would be to put the $10,000 into a registered retirement savings plan, then pay any resulting tax

refund against your mortgage, McKinley said.


“That’s kind of the best of both worlds,” he said.


The bonus will be reduced based on a buyer’s or couple’s net income. For single people, the bonus is reduced by

20 cents for every dollar in net income over $150,000 (it’s reduced to zero at $200,000 net income). For couples,

the bonus is reduced by 10 cents for every dollar in family net income over $150,000 (it’s zero at $250,000 family

net income).


The bonus, which is applicable to new detached houses, duplexes, townhouses, condos, mobile homes, floating

homes and co-operative housing units, and applies to homes where the HST is now payable. McKinley said

Vancity also has a “mixer mortgage” where roommates can go together to buy a home they wouldn’t be able to buy



“It also works well for parents and children, because the parents can own part of the home as an investment,

while it helps the child get into the market,” McKinley said. “It definitely helps people get into the market younger.”


The bonus could be split between two purchasers, but only one bonus will be paid per property.


Once the legislation is passed, application forms will be made available, and the bonus should be paid out soon

after. The bonus ends March 31, 2013, when the harmonized sales tax is replaced by the goods and services tax.


Read more:


Setting the stage for a sale

Showrooms aim to present clear picture of a lifestyle

By Pedro Arrais, Times Col

Herald Street condo living room for the young and busy downtown denizen.



The old sales aphorism, "Sell the sizzle, not the steak," perhaps explains the increasing use of home staging for

new developments. Home staging refers to the art of preparing a property with furniture and other items to create a

welcoming and appealing atmosphere.


Some people are convinced the trend toward staging homes started soon after October 1997. It was on that date

that HGTV started broadcasting home-improvement programs about homes and gardens. The generation that

watched the show -- and the others that followed it -- have become accustomed to images portraying well-

designed residences.


"People have become spoiled," says Tracy Menzies, a real estate agent with Pemberton Holmes. "They like to see

how the home fits their lifestyle. If they can't picture themselves in the home, they leave" and keep looking until they

find a place that lets them feel at home.


Menzies says developers would rather not stage a property. But they skip this step at their peril. Real estate

agents agree that a well-staged home can reduce a listing's time on the market. It can also fetch a better price

than a home that is empty or with dated or unappealing furnishings.


She says the services of a professional stager isn't cheap. A suite can cost $2,500 (or much more) to be staged,

and a monthly rental fee for all the props the staging company provides for the suite -- right down to the soap in the

bathroom -- adds up. On average, a suite may have up to 500 items to give it its particular look.


Brent Melnychuk, the senior designer at Dekora Staging in Vancouver, won't go into how much he charges to

stage a listing, only to say it depends on the project. "My job is to make the prospective buyer picture themselves

living there," says Melnychuk, who has been staging for more than a decade. "Stagers walk a fine line. The

displays have to create a utopian lifestyle for the buyer, but can't be too specific. I try to shoot for a design that

shows how a person can live in a space now -- and also in a decade."


A home stager gets important information from the developer or sales agent: What is the age of the target buyer?

Are they single or married? What is their net worth? Is the development low, middle or high-end? Once the target

demographic is identified, the home stager tries to find emotional "hot buttons" that resonate with the

buyer. "Sometimes, as I am showing a suite, a client notices an item on display and says, 'Oh, my goodness,

where did you get this?' and will ask where they can buy one," says Menzies. That's music to the ears of

Melnychuk, who staged four suites in 601 Herald St., a recently completed development near Chinatown.


While the goal is a feel of what he calls "tasteful and timeless" for the four suites, each individual suite gets a

tweaking for the target demographic. A small, 450-square-foot one-bedroom suite is designed to evoke the feel of

a boutique hotel room that emphasizes cool functionality and youthful appeal. The larger two-bedroom has a

balcony and is targeted toward empty-nesters with warmer, softer tones.


The building's architecture and its location also have an influence on how a room is presented. Sometimes the

decor is so attractive that buyers have been known to ask for the furnishings to be included in the sale. Melnychuk

says that's not a problem and his staff will itemize the objects used in the staged suite -- right down to the

aforementioned soap in the bathroom.


"People buy on emotion," says Menzies, a 15-year sales veteran. "But people these days also have less time.

They typically don't want to take the time to fix up a place. A staged home is appealing because it means they can

have it all -- and have it right now."


Melnychuk says home-stagers come from the same family as interior designers. An interior designer might be

involved with a project earlier to set the overall tone. The stager comes later, to give a show suite the finishing



"We don't create a fantasy, we just make a home look more desirable by altering reality."



Read more:


Two housing reports point to improving affordability

Andy Johnson, Date: Wed. Mar. 7 2012 11:07 AM ET


Two new housing affordability reports released Wednesday offered a similar viewpoint: Canada's housing market

is beginning to level off and prices are shifting in favour of buyers. 


Scotiabank's Adrienne Warren, a senior economist and real estate specialist with the bank, said the market is

cooling but still remains in better shape than many international markets. "I'm fairly encouraged by what we're

seeing in the Canadian housing market currently. Essentially we're looking at sales that have largely levelled-out

over the last year or so but still it's quite a healthy pace of build, essentially really in line with the 10-year average,"

Warren said at the Real Estate Outlook and Trends Forum in Toronto. Prices are easing, she said, as the

combination of higher prices, tighter mortgage regulations and slowing job growth have a cooling effect on

demand. "In general I think we're looking at a relatively level pace of activity and as far as I'm concerned I think

that's about the best-case scenario -- that we could see a still healthy housing market that supports the overall

economy but not one that continues to heat up." Warren did warn that if job growth slows significantly, or

household debt spikes, the housing market would suffer.


RBC housing affordability report

Meanwhile in a separate report also released Wednesday, the Royal Bank said it became slightly more affordable

to own a home in Canada for the second straight quarter. The RBC Housing Trends and Affordability Report found

that at the end of 2011 home prices eased off and income increased -- two forces that combined to give a break to

the market. 


"The improvement in affordability was modest for the most part, but still significant enough to dial back the

deterioration that impacted the market in spring last year," said Craig Wright, senior vice-president and chief

economist, RBC. Wright added that the cost of owning a home represented less of a "pinch" on household

budgets in the fourth quarter of 2011, following an earlier improvement in the third quarter. National affordability

levels took a major hit in the first half of 2011, the report says, mostly driven by steep real estate price increases in

Vancouver. However, prices in the city eased in the second half of 2011 and aligned more closely with those in

housing markets across the country. Wright said the report predicts home affordability across the country will

continue to improve going forward, largely due to low interest rates.


"At this point, housing in Canada is essentially as affordable as it was a year ago, and only slightly less affordable

on average than it has been over the long term," Wright said. "All things considered, the housing market is sitting

in a reasonably balanced position overall, despite some minor stress being exerted on housing demand."


The RBC Housing Affordability Measure uses the cost of owning a detached bungalow as a benchmark to

measure affordability and comes up with a percentage that represents the portion of pre-tax household income

required to cover ownership expenses.


Following are the results for some key cities across Canada (change from previous quarter in brackets):

  • Vancouver: 86 per cent (-4.6 percentage points)
  • Toronto: 52.2 per cent (-0.1 percentage points)
  • Montreal: 40.1 per cent (-0.7 percentage points)
  • Ottawa: 40.9 per cent (-0.1 percentage points)
  • Calgary: 36.7 per cent (-0.7 percentage points)
  • Edmonton: 32.8 per cent (-0.3 percentage points)
  • Halifax: 32.6 per cent (-0.3 percentage points)

Interestingly, despite the fact Vancouver saw the largest improvement in affordability, it remained the least

affordable city in Canada to own a home with estimated home ownership costs eating up the lion's share of a

typical household's monthly income.


In Alberta, which enjoyed one of the more affordable housing markets in Canada, there was a notable hesitancy

among buyers, the report said. That's unlikely to last, however. "Going forward, a strong labour market and

affordable housing should shake off any hesitation that Alberta homebuyers may have," the report said.

Calgary's housing market was relatively flat in the fourth quarter of 2011, which was surprising considering the fact

31,000 new jobs were created in the city in 2011.


Saskatchewan saw a surge in home resales, with affordability improving across most types of housing.


Manitoba was the only province to record a slight deterioration in affordability in Q4, with high demand tightening

conditions and driving up prices, particularly for two-storey homes and condominiums.


In Ontario sellers continue to hold the upper hand, with high demand among buyers despite the above-average

proportion of household income required to own a home in the province. "This does not appear to be a strain on

homebuyers in the province at this stage. Home resales advanced at a good clip in the fourth quarter and the tight

availability of homes gave sellers the upper hand," the report said.


Housing affordability in Quebec remained stable in the fourth quarter of 2011, while Atlantic Canada saw an

increase in resale activity based on two consecutive quarters of improving affordability. While markets across the

Atlantic Canada region were generally balanced, St. John's saw a surge in growth near the end of 2011, along

with Halifax -- which may have been attributable to a successful bid for a major shipping contract worth $25 billion.

"This puts Halifax ever closer to becoming a seller's market, while buyers still have the upper hand in Saint John,"

said Robert Hugue, senior economist at RBC, in a release.

Read more:

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