Real estate listings specifications and features statistics can be misleading. Once again misinformation is being conveyed about our Comox Valley real estate market. Whether this is deliberate based on some agenda, or merely as a result of a lack of understanding of our market is unknown. Nevertheless, yesterday a headline in one of our local Comox Valley newspapers under the news section read “Big Fall in Home Sales, But Prices Rise”. The author of the article was not provided in the article. Someone who does not follow our market closely, after reading this headline, may conclude that prices of most Courtenay property listings are increasing. This is not the case.
The Comox Valley newspaper article makes reference to a large drop in Comox Valley home sales in September compared to the same month a year ago. This is accurate. The article then goes on to mention that the average single home cost was higher by about 7% in September 2012 compared to the same month a year ago. This real estate statistic is nearly meaningless. Why is this you ask?
First, the statistical average of the sale prices of single family homes in the Comox Valley fluctuates on a month to month basis (view the graphs near the bottom of my home page that provide this type of information since January 2010). Average home prices since Jan 2010 have hit a monthly high of about $375K and a monthly low of around $325K. These variations have had more to do with the prices of the homes that sold in a given month than they did with where prices were headed. We are a small realty market, When a few higher priced homes sell in a specific month, the effect on the overall Comox Valley average can be significant. In September 2012, for example, a few homes sold in the $500,000 range and these sales had the effect of increasing the statistical average single family home price from the average of the previous month (and compared to that of the same month last year). More importantly, average prices are not a good barometer of the market or what is happening to real estate prices. Median home prices can provide a better sense of where most of the activity is in a particular price range in the market but neither, on their own, should be used to gain a sense of what is happening to prices in the Comox Valley real estate market.
Second, there are differences within the Comox Valley home market. Single family homes, waterfront homes, luxury homes, and condos, can be, and often are, effected in different ways in the same market. Similarly, higher end single family homes can experience different pressures than those priced in the middle and lower end of the market.
Third, to fully understand what is happening in the Comox Valley property market requires persistent effort and attention over time as well as first hand experience working within the market. Some statistics are useful to gain a better appreciation of the market. Metrics such as sell to list ratios, days to sell, and the number of months of inventory all contribute to a better understanding of what is happening. Each one, however, should not be considered in isolation, without specific context, or over too short a time period.
We remain in a home buyer’s market and there are variations in our market based on the type of home, location, and price range. If you are considering the purchase or sale of a home in the Comox Valley, contact me and let’s discuss your specific needs and circumstances. I can help provide you with a better sense of the market and the opportunities that you may have as either a buyer or as a seller.
What are Comox Valley Real Estate Contracts?
Comox Valley real estate contracts can be fairly straight forward or fairly complicated. Comox Valley Real estate agents can, and do, provide a range of real estate services to real estate clients and customers. Some agents work full-time and others work part-time. Some provide full-service real estate services while others provide discount services. As well, some agents charge more than others for the services that they provide. When looking for all of the gorgeous homes offered for sale and the services of a competent real estate agent, the age old adage you get what you pay for applies to real estate just as it does to most other things in life.
Real estate considerations vary when choosing an agent. While Comox Valley real estate agents differ in their education, training, and experience, they all must do one thing in common in order to effect a real estate transaction. They must prepare and deal with real estate contracts. Real estate agents are not lawyers and they do not provide legal advice. However, they should be familiar with legal terms and know how to prepare legally binding Contracts of Purchase and Sale. They should also know when to recommend that clients seek legal advice on a wide range of real estate related issues. Real estate agents are required to take a legal update course every two years. Some agents meet the minimum professional development requirement while others exceed the requirement.
Writing a legally enforceable Comox Valley real estate Contract of Purchase and Sale is a task that may range from one that is fairly straight forward to one that is quite complex. BC real estate law does change fairly regularly and the situations and circumstances that apply to each real estate transaction can be unique. When everything goes right and a transaction completes as expected by both parties there are generally no issues. However, what happens when things do not go right or as expected? Problems can arise that may range from injured feelings to a law suit. When things go wrong enough, the Contract of Purchase and Sale and all of its various terms and conditions often becomes a focus. It is very important that the contract was written correctly and completely.
Contracts can be executed between parties and assigned to other parties. They can be written as a standard real estate Purchase and Sale Agreement, an Agreement for Sale, a Conduct of Sale, and in a number of other forms. The British Columbia Real Estate Association has prepared a number of different versions of Contracts of Purchase and Sale and their related Addendums to cover most situations. For example, the contract used for the purchase of a residential home is different than the one used for the purchase of a Manufactured Home on a Rental Pad.
Each Contract of Purchase and Sale will contain terms and conditions for home buyers and home sellers. A term is a promise that forms part of the contract. For example, the first term of the standard contact sets out the purchase price that the buyer promises to pay the seller and that the seller promises to accept. The word condition may refer to an essential term in the contract but it is most frequently used to describe a subject clause. In this context, a condition is a future event or action on which the existence or the extent of a contractual obligation depends. For example, subject to the sale of the buyer’s home. Once in a while, it may be necessary to use a non-standard clause in the drafting of a contract. When drafting such a clause, the differentiation between a condition and a covenant is important. A covenant does not depend on a future uncertain event or action. It is an enforceable promise to do something or to refrain from doing something. For example, the seller promises to repair the washer and dryer at the seller’s expense no later than 3 days before the completion date. The law requires that all of the clauses in a contract be sufficiently clear so that it can be readily and easily determined when the criteria for satisfying each of the clauses are met.
Contacts of Purchase and Sale are not the only forms used for real property transactions. More than 75 different forms were in use at the time of the writing of this blog. As well, there were more than 160 different clauses in use that could be used in a real estate Contract of Purchase and Sale Addendum (in addition to those contained in the Contract). There are clauses that apply to titles, zoning, fees, warranties, approvals, assessments, assignments, responsibilities of the parties involved, estates, cooperatives, deposits, finances, insurance, rebates, obligations, different Acts and Regulations, licenses, inspections, leases, tenants, advice, insurance, stratas, developments, occupancy, property disclosure, documents, trades, taxes, registrations, searches, and other issues such as wood burner considerations.
Clearly, not all forms are required for every real estate transaction. As well, most of the more than 160 clauses would not be required for the majority of the Contracts of Purchase and Sale prepared for real estate listings in an near the town of Comox. While this is typically the case, real property agents need to be aware of these forms and clauses and be able to apply them correctly and completely during the real estate process and in the contract prepared between the parties involved. Keeping up-to-date as they are changed or modified and new ones added is also important. A formal Professional Development Program is in place and it is monitored by the organizations that oversee real estate in British Columbia. Some real estate agents use this program to maintain currency on contractual issues as they evolve while others do much more to maintain currency.
As a real estate buyer or as a real estate seller, are you thinking about buying or selling Comox Valley real estate? Have a question about the real estate process or any aspect of it? Contact Brett Cairns of RE/MAX Ocean Pacific Realty.
Why Comox Valley Assessments Versus Appraisals?
Comox Valley assessment and appraisals both apply to real property but what is the difference? Every year a homeowner receives a Property Assessment Notice. When a homeowner, who is working with a Comox Valley real estate agent, decides to list a home for sale on the Comox Valley real estate market they are provided a comparative Market Assessment (CMA). When a person purchases a home, they become aware of the financial institution that is providing them with a mortgage having an appraisal done on the home. What are these assessments and appraisals all about?
Comox Valley Property Tax Assessments are completed by a BC Assessment authority. Property assessments of this kind are completed to determine how property taxes are distributed and they are tied to specific dates. Generally the assessed value is estimated as of the 1st of July of each year. The assessed value is supposed to reflect the property’s physical condition and permitted use as of the 31st of October of each year. Some assessors may acknowledge that they aim to be accurate within 5% of the actual value of the property. Remember that in many cases, the assessor has not visited your home and that they are completing the assessment based on statistical information that they have in their office. When was the last time that you asked to see this information to see if it is correct? For example, your Comox home for sale may be listed as having a finished basement when it only has a partially finished basement.
The assessed value contained in a Comox Valley Property Assessment Notice is called the taxable value for property tax purposes. Property taxes are calculated based on a multiplication of the assessed value and the tax rates established by Municipal (or Taxing) Authorities. It is interesting to note that the Property Assessment Notices contain the following statement “An increase in your assessment does not necessarily mean an increase in your property taxes”. If you were to place a bet on whether they will increase or decrease, which way would you bet?
When you purchase a home that you require a mortgage for, you will generally do through a financial pre-qualification and pre-approval process for the mortgage. Remember that the home you want to purchase also has to qualify because residential mortgage loans are mortgage loans secured by residential property. This is one of a number of important real estate considerations. Before approving the mortgage, the lender will need information about the value of the property and the personal financial characteristics of the borrower. An appraiser, reporting to the lender, provides a statement of the current value and possible future trends of the property. It is important to note that if the value of the security exceeds the outstanding balance of the mortgage throughout the life of the debt, the lender’s financial investment remains protected. Lending value (value for mortgage lending purposes) is a long-term conservative estimate of the value of the property pledged as security for the loan.
The Market Value of a Comox Valley property is an estimate of what a property is likely to sell for in an arm’s length transaction between a willing, informed and rational average buyer and seller, if the property is on the market for a reasonable period of time when market conditions are unchanged. More simply stated, the market value of your home is the price that your home is reasonably expected to realize after adequate time and exposure to the real estate market. Market value is determined by standardizing and averaging a number of specific, recent observed transactions (sales) to produce an estimate of what the property might sell for in the current market conditions under defined circumstances. In practice, the determination of market value is both an art and a science.
Generally, lending value is less than market value, sometimes equals market value, but normally does not exceed market value. In order to protect the long term security of the loan, lenders often consider applications on the basis of the lower of a property’s market value and its lending value. It is important to note that purchase price (the price that is stipulated and agreed to between the buyer and seller in the Contract of Purchase and Sale) is not tied to either value. Moreover, purchase cost is the total cost of the purchase (purchase price plus applicable fees and taxes).
Real estate appraisals can also be undertaken for a number of other reasons. As well, they can be undertaken using a variety of methods that include the Comparative (or Market) method, the Cost method, and the Income (or Investment) method. It is interesting to note that, in BC, as of the date of the writing of this blog, that anyone may legally undertake appraisal work and charge a fee for appraisal services without having to be licensed. Having said this, most professional appraisers have some form of accreditation. As well, to obtain the professional designation to be eligible for insurance, coursework must be completed at the Sauder School of Business at UBC.
Our home values and prices can, and do, fluctuate throughout the year. Our real estate market can be subject to localized influences (location, price range, type of dwelling, etc.). Real estate agents are often asked to provide sellers with the market value of their home so that they can make decisions on the asking price when they list their home for sale. Market value is generally determined through a Comparative Market Assessment (CMA) that is based on a specific number of sales of comparable homes in the neighbourhood of the seller. But what happens when there are no comparable homes or sales in the neighbourhood? While all real estate agents are taught the process used to determine a CMA on a home, they vary widely in education, training, knowledge, and experience (real estate, professional, and life).
There are also some very important cautions related to the determination of market value by a real estate agent and a few of them are discussed on this website under Sellers Info. Should you wish to discuss this topic or request a CMA, contact Brett Cairns of RE/MAX Ocean Pacific Realty.
Why Brett as your Comox Valley Real Estate Agent?
Why Brett as your Comox Valley real estate agent? One of the great things about the country we live in is our ability to choose freely what we do and with whom we associate. Some countries in our 21st Century world still do not operate this way. Having extensively traveled around the world, I have witnessed some of them first hand. This travel experience made me realize just how terrific it is to live in Canada. Democracy is a great thing and so is living in the Comox Valley.
While some people are fortunate enough to grow up in the Comox Valley, many choose to relocate to our Canadian oasis. When they do they often turn to a real estate agent for assistance. Choosing a Comox Valley real estate agent is a personal and important decision. Why people choose who they do will vary. If you are considering this important decision, consider the following.
RE/MAX has a global presence and the company is featured in 89 countries around the world in 6317 offices. At the time of the writing of this blog, the company had 88,922 REMAX affiliates. No other real estate company sells more real estate than RE/MAX. This year, RE/MAX celebrates its 40th birthday. The company has a substantial online presence with a global site, national sites, regional site, and local sites. Within Canada, RE/MAX maintains an online presence through remax.ca, a Western presence through remax-western.ca, a British Columbia presence through remax.ca/bc, a Vancouver Island presence through realestateonvancouverisland.com and a local presence through oceanpacificrealty.com.
RE/MAX has been #1 in Canada since 1987. While also outperforming its competitors at the national level, REMAX also sells more luxury properties under the RE/MAX Collection brand than the others based on MLS statistics in Vancouver, Calgary and Edmonton. Surveys have shown that RE/MAX has the highest real estate brand recall with Western Canadian consumers and that its agents scored the highest of all the brands with consumers surveyed. Locally, RE/MAX Ocean Pacific Realty achieved the leading market share in 1987. Today, it maintains this leading share with close to 50% of the Comox Valley home market. There are two Comox Valley RE/MAX offices – one in Comox and once in Courtenay. Brett is an realtor with the Comox office.
Why Brett as Your Comox Valley real estate Agent?
Brett Cairns of the RE/MAX Ocean Pacific Realty office in Comox, British Columbia provides full time, full service, bilingual, professional Comox Valley realty services throughout the Comox Valley. He has the power of the RE/MAX brand as his foundation and more than 35 years of education, training, and experience as a professional who practices continuous learning and adheres to a code of professional conduct.
Brett Cairns understands the importance of character and competence along with attitude, motivation (why someone is doing what they do), and work ethic. Some testimonials appear on this website and others appear on Brett’s google plus business page. If you wish to speak to people who know Brett ask him and he will be pleased to arrange it.
Are you looking to buy some of the best and most expensive Comox Valley properties? Do you have a Comox Valley home for sale? Are you just starting to browse the Comox Valley MLS listings? For a general sense of the services that Brett Cairns offers to home buyers and home sellers in the Comox Valley, please peruse this website. Contact Brett Cairns of RE/MAX Ocean Pacific Realty to discuss his Above & Beyond approach to providing real estate services to clients.
What are Popular Myths About Comox Valley Real Estate Fees?
Popular myths about Comox Valley Real Estate Fees are plentiful. Here are a few:
Why list with a Comox Valley real estate company when they charge so much to sell my Comox Valley home?
This is a very good question. Like any other service based business, Comox Valley real estate companies and the Comox Valley real estate agent must provide value to the people who pay for their services if they wish to stay in business. They deal with a wide variety of Comox Valley property and Comox Valley clients. Some services they provide are taken for granted. For example, when a Comox Valley buyer searches real estate listings on the Comox Valley Multiple Listing Service or real estate website, few consider who had to pay for and maintain the systems. The Comox Valley realtor often pays quite a bit to do so.
To answer this question completely, I will discuss the following:
- who pays real estate fees?
- who receives the commission?
- who provides the services?
- what costs do real estate agents incur to provide services?
- what services do real estate agents provide?
- the end result
Who Pays Real Estate Fees?
When a person who wishes to sell their Comox Valley home lists the home for sale with a Comox Valley realtor, the home seller agrees to pay a fee to the listing brokerage (the real estate company through which the real estate agent is licensed to practice). This real estate fee is called a gross commission in a Multiple Listing Contract. A gross commission is paid on the sale price of the home when the sale of the home completes. If the home is not sold during the term of the agreed listing contract, nothing is paid to the listing Comox Valley real estate agency for the real estate services that were rendered to the seller by the brokerage and the agent. When there is a completed sale, the gross commission (represented by the blue circle in the figure below) is paid to a number of parties.
Who Receives the Commission?
Generally, listing brokerages offer a portion of the gross commission to the cooperating brokerage that finds a buyer for the Comox Valley home or property that is listed for sale. This is generally one half of the gross commission. In this circumstance, the listing brokerage receives the other half. From this half, they must pay out any referral fees that may be applicable to the sale. They then deduct their own brokerage fees in accordance with the contract that they have with the Comox Valley realtor. It is important to realize that the brokerage maintains office staff who provide services such as reception, sending the listing to the real estate board, maintaining the financial books, ensuring that lawyer and/or notaries who are involved in the sale get the contracts and other documents that they need, receiving and being responsible for deposits paid, and a number of other things. The brokerage also maintains a facility to accommodate agents and clients.
After the agency portions of the saleprices of homes listed on the web for Comox commission are removed the realtor receives the remainder. From this remainder, the agent must pay their business expenses and income taxes leaving what is left as the net pay to the individual agent. What starts out seemingly as a large amount of money can become a lot smaller by the time the agent receives their share as net pay.
Who Provides the Real Estate Services?
While the Comox Valley realty (brokerage) does provide services, the real estate agent must provide most of the services to the seller and/or buyer. The type and number of services provided, along with the timing and timeliness of these services varies with each individual real estate agent. As a Designated Agent in British Columbia, the real estate agent works for you and protects your interests. They take courses such as Legal Updates to do just that through such things as the writing of legally enforceable contracts specific to the situation and circumstances of the purchase or sale.
What Costs do Real Estate Agents Incur to Provide Property Services?
Some of the costs incurred by real estate agents are standard and they apply to every agent. These are paid by the agent and include, but are not limited to, expenses related to:
- Real estate Licensing courses and exams to become licensed as a real estate agent
- Re-licensing fees every two years required to maintain a real estate license
- Post-licensing courses required to meet minimum professional development requirements
- Canadian Real Estate Association Fees
- British Columbia Real Estate Association Fees
- Local Board Fees
- MLS ® Access Fees
- System technical Fees
- Agency Dues and Fees (Corporate, regional and local)
- Agency training courses
- Continuing Education Courses such as Legal Update Courses
- Document Search Fees (titles, strata, registry, etc)
- Signs and Frames
- Real Estate Lock boxes
- Real Estate Lock box electronic opening devices
Many real estate expenses will vary by agent and according to the type and nature of the services that they provide. They can include, but are not limited to, expenses related to:
- Real estate marketing (print, online, radio and perhaps TV in large market areas)
- Real estate advertising (print, online)
- Office Equipment (computer, laser printer, scanner, fax machine, etc.) and Supplies (paper, envelopes, file folders, real estate forms, laser ink, etc.)
- Professional Equipment (Video equipment, Video Steddiepod, photographic equipment, camera tripod, etc.) needed to take video, audio and photos to market the home)
- Video and Photo Editing Equipment / Software
- A variety of software programs (scanning, publishing, etc.)
- Mobile Electronic Equipment (smart phone, tablet and laptop for mobile operations)
- Real estate website (creation and ongoing maintenance and hosting)
- Website Search Engine Optimization and added Website Features and Functionality
- Content Management System and Client Database
- Vehicle expenses
What Services do Real Estate Agents Provide?
Some agents provide full-time, full-service listings of properties and real estate services while others do not. What is meant by full-time, full-service also varies amongst different real estate agents. For example, does full-time mean 9-5 Monday to Friday? Does it include work outside of these hours? How much? How often? What is meant by full service? Does the listing agent put a sign on the lawn, place an ad in the local newspaper, add the listing to MLS ® and hope someone finds a buyer for their listing through a Comox Valley MLS search? Or, do they do much more? As a real estate client myself on many occasions; some agents did very little and were useless, while a few did a lot and were effective in selling my home.
The End Result
At the end of the day, the cost of real estate services should be measured against the type, nature and the quality of the services provided and the result – your home SOLD. When measured against these metrics, the age old adage You Get What You Pay For is generally true. Is your measure one of real estate cost or value?
As a real estate agent and business owner, I have significant expenses each and every month. Major professional expenses include those to maintain my professional qualifications and current knowledge, and those related to effectively marketing and successfully selling homes. My other business expenses are numerous and varied. Expenses to maintain the website that hosts the blog you are reading represent a small portion of my monthly expenses. While I am pleased to provide this and other types of information to help people who have questions about real estate, I only provide real estate services to clients. Like any other business owner, I cannot stay in business if I provide professional services for free.
Why list with a real estate company when they charge so much to sell my home?
Thinking about selling your Comox Valley home yourself? What are the consequences when something goes really wrong? Who is there to help? What are the most important questions and considerations? If you are thinking of selling your Comox Valley home contact Brett Cairns of RE/MAX Ocean Pacific Realty.
Comox Valley Real Estate – Is Social media Social?
The Comox Valley real estate market benefits from the use of technology. Technology is terrific when used at the right place, at the right time, and for the right reasons. Technology certainly has its place featured in my life, and it serves a very useful purpose in many different ways. For example, I certainly would much rather fly or drive to California than ride a horse.
When I was in a Comox Valley gym over the weekend I could not help but notice the use of technology in ways that do not improve my quality of life. There were 7 other people working out in the weight room. Even though the radio was on over the PA system for all to hear, each of the 7 other people were hooked up to their own music and earphones via I-pods, etc. Not a single one was interacting with anyone else. They were in their own little worlds and oblivious to the rest of us. Social interaction and sociability = zero.
The last time I was out with my wife at a local pub, we noticed a young couple at a nearby table who were both texting on their smart phones. They did not say a word to each other during the meal but they did spend a great deal of time interacting with their smart phones. This experience was similar to watching two young children who were sitting across from each other at the same table. They were texting each other the entire time that they were there. They did not say a word to each other. Quality social interaction?
At church this morning, the purse of a woman in front of us began to make strange sounds. Her cell phone was vibrating and ringing for over a minute during prayer. What did she do? She moved the purse from the seat beside her to the floor. Did she turn off her phone? No.
The internet is given credit for a revolutionary impact on culture and commerce since the mid-1990s. The revolutionary impact is hard to argue against, but has the impact been all positive? Social networks were spawned in the early-2000s. Friendster opened in the US in 2002, Linked In for professionals started in 2004 and Facebook emerged in 2004. You Tube began hosting videos in 2006, Twitter appeared in 2006, and Apple released the internet smartphone in 2007. Facebook reached a billion users in 2012. Communication via the web is common through email and tweeting and by posting messages on social networks. Texting is common via smartphones. Comox photography based real estate listings are seen by the world. But how social is the interaction?
The internet certainly has helped business. In the Comox Valley most of the high technology based real estate business, for example, we now have an ability to post information about homes on the internet, and get wide exposure for Comox Valley homes that are for sale. Through networks, we can communicate with many different people over vast distances. While this is a good way to give people who are far away a sense of Comox Valley homes, none of this technology can replace viewing a home in person. Some home show well online and some do not. I have worked with Comox Valley real estate clients who loved a home online but hated in when they saw it in person. The opposite of this experience has also been experienced.
Social interaction is the basis of social structure and important to human health. To interact, we must communicate. Communication involves both a process and an effect. The process involves a message that is sent and one that is received. The effect is message understood as intended. How often does this actually happen?
As humans we are born with social tendencies and, for the most part, five senses (sight, hearing, taste, smell, and touch). When we communicate face-to-face, how many senses are generally involved? Sometimes non-verbal communication is important to get the right message across.
How many times have you sent an email to someone and did not get a reply? Did the person actually receive the email or did they choose to ignore it? When we email someone, do we assume that they will receive the email? Spam filters can and do intercept emails on a regular basis. Do we assume that they are by the computer or other device that will receive and host the email until it is read? When we text or tweet do we assume the same thing? How many times was a message misunderstood exactly as intended? Worse, how many times has someone used the relative anonymity of the internet to be ignorant to someone else. Recently I agreed to allow someone access to an internet service for free that I pay for and she had the nerve to complain and be rude to me even though she had never met me.
Nearly 90% of home buyers start their Comox Valley home searches online. They are now able to access vast amounts of information and websites that host the information. For the most part, these visits are accomplished with the anonymity that the internet can provide. However, the websites being visited are developed, maintained and paid for by business persons. In the real estate industry, many businesses are run by only one or two people. When a stranger accesses a website and asks for information, the response must come from a person. That person must be willing to spend time, effort and money (yes money because time is money in business, and the systems used to host the information cost money to operate and maintain) to provide you with the answer. If you were dealing with that person on a face-to-face basis, would you interact differently than you do while you are online? Technology is cold and impersonal but people do not have to be. Be social and personable, and remember that there is a person on the other end of the system. Karma is real.
Consider the following age old expression: Mind your Ps and Qs is an English expression that commonly meant mind your manners and it was commonly considered a short form for please and thank you. When we send an email to someone that we do not know and ask them for information, do we use please when we request something from someone else? Do we acknowledge them when they reply? Do we thank them for the time and effort they spend on crafting a reply that provides us with the information that we requested? The words please and thank you are powerful and they can go a long way in helping you get the information that you want. If you were the person being asked for the information for free, would you expect anything different?
When it comes to Comox Valley real estate information, I aim to provide my clients as much information as I can to help them make their real estate decisions with Peace of Mind. As well, I maintain a website to help others who are looking for real estate information so that they can make informed choices. Contact me when you need information, and I will be pleased to help you. Thank yous are appreciated.