Informative Real Estate Topics | Comox Valley

Real Estate – How Local?

June 23, 2014 by Brett Cairns

Real estate in Canada is a highly regulated industry all the way from the federal level down to our local Comox Valley. Unfortunately many aspects of the real estate industry are not fully understood by the Canadian consumer. When consumers browse through Comox real estate listings they are not struck by all of the regulatory issues that can and do apply to this local market area. Canadian news headlines that discuss things like real estate bubbles in Canada or the prices of real estate in Canada are not particularly helpful in clearing up some of the misconceptions and lack of understanding of this complex industry. The real estate industry is regulated by many different statutes (laws). This industry is affected by economic factors and it is influenced by several different organizations within Canada. Similarly, the Comox Valley real estate market is affected by many different and varied inputs and factors.

From a regulatory standpoint, the federal government has jurisdiction over things like trade, taxes, the postal service, currency and banks, criminal law, and the militia and defence. When it comes to real estate, however, this responsibility rests with the provinces just as it does with health and education. The source of this division of powers between the federal and provincial governments is sections 91 to 95 of the 1867 Constitution of Canada. The provinces provide direction and guidance in the form of statutes and regulations.

There is no federal Real Estate Act, but the following federal statutes can and do have a bearing on real estate in each of the provinces. These include, but are not limited to the:

Personal Information Protection and Electronic Documents Act;
Proceeds of Crime and Terrorist Financing Act;
Competition Act;
Aeronautics Act; and
Criminal Code.

At the federal level, real estate can be affected by economic factors such as federal monetary and fiscal policy. Monetary policy is carried out by the Bank of Canada through its policy instrument called the overnight interest rate. This key interest rates affects all other interest rates such the mortgage rates available to the Canadian consumer. The real estate industry can also be impacted by federal fiscal policies developed and monitored by the Department of Finance. Specifics are often announced in the Federal Government’s annual budget and summarized in the Department’s Report on Plans and Priorities. As well, policies aimed at regulating the operations of organizations like the Canadian Mortgage and Housing Corporation (CMHC) can also have a direct impact on real estate across the country. They can also have an impact on local real estate decisions within the Comox Valley real estate property and housing market.

Influence at the national level can come from a variety of sources as the government developed and implements policies and programs. One of the better known organizations is the Canadian Real Estate Association (CREA). Among other things this organization maintains and its members pay for the realtor.ca website that many Canadians access on a regular basis in order to find out what homes are available for sale through the Multiple Listing Service (MLS) system used by real estate boards throughout the country.

As mentioned earlier, the responsibility for real estate rests at the provincial level. Within the province of British Columbia, one of the main references for real estate is the Real Estate Services Act. Others include but are not limited to the:

Law and Equity Act;
Business Practices and Consumer Protection Act;
Homeowner Protection Act;
Wills Variation Act;
Fish Protection Act;
Heritage Conservation Act;
Environmental Management Act;
Land title Act;
BC Limitation Act;
Personal Property Security Act;
Residential Tenancy Act;
Local Services Act;
BC Fire Code; and
Health Act.

Just as federal fiscal policies can affect real estate so can provincial ones. British Columbia’s budget and fiscal plan is currently provided by the Ministry of Finance as a three year plan. As of the writing of this article, the current plan is dated February 18, 2014 and it covers the Fiscal Year (FY) years of 2014/2015, 2015/2016, and 2016/2017. As an example, this plan announces taxpayer-supported infrastructure spending on hospitals, schools, post secondary facilities, transit, and roads totaling $11 billion over the fiscal plan period. While announcements such as these are interesting at the provincial level, they are vital at the local when when a place like the Comox Valley is affected. The recent announcement of a new hospital to be built in Courtenay for the Comox Valley is an example of one such important announcement that has significant local real estate impact.

The British Columbia Real Estate Association is one of the provincial organizations that can have influence on real estate at the provincial level. Among other things, the organization is involved in realtor education and the analysis of economic factors affecting BC’s housing market. One of the news updates posted on their website focused on how May 2014 home sales were the strongest for that month since 2007 ( when the real estate market peaked in BC).

Below the provincial level, there are a number of organizations that exist at the regional and local levels that can and do regulate real estate. In our area, the Comox Valley Regional District has regional responsibilities while other organizations like the City of Courtenay, Town of Comox, and Village of Cumberland regulate within their own areas of responsibility. Each of these organizations can also have an impact on economic factors that affect real estate at the regional and local levels. Add the Vancouver Island Real Estate Board (responsible for all of Vancouver Island except Victoria) to this melange of organizations and the complexity becomes increasingly evident.

Step down another level and land developers, builders, and individuals have roles to play and impacts to make. For example, if a developer were to develop a large tract of land within the Comox Valley, the development would have an economic impact and it may have other impacts related to real estate. All of this type of activity must take place within a regulatory framework that is both comprehensive and complex.

When buyers and sellers plan to buy and sell real estate in the Comox Valley they may be faced with many different challenges. Some people who try to do this themselves may not even appreciate what the challenges are and will be. What laws apply to the potential transaction? How have these laws changed or been amended lately? What factors mighty come into play for a specific property? How important are these factors? Do any of them requires specialized advice or expertise? How much time will it take to effectively address the various factors?

Buying or selling a home is not like buying or selling a consumer product like a car. The laws are different, the processes are different, and the considerations that could come into play are different. Also different is the relationships that exist in these two different industries. When you walk onto a car lot the salesperson who works for the dealership is there to sell you a car. They work for the business and not for you. In real estate, realtors can help you buy or sell your home or property. They can work exclusively for you in most circumstances. This change known as Designate Agency became the industry standard in BC on June 1, 2012.

For most of us in Canada, our homes are our most expensive asset. When buying or selling such an asset does it make sense to have a knowledgeable and competent professional working exclusively for you who will look out for you and your interests? Realtors provide professional real estate services each and every day to buyers and sellers of homes in the Comox Valley. To find out more about the Comox Valley real estate market or to hire a professional realtor to guide you through the buying and selling process, contact Brett and get started meeting your Comox Valley real estate needs.

Real Estate and the Comox Valley

June 16, 2014 by Brett Cairns

Real Estate is very important to most Canadians. The significance of real estate in our lives stems from a variety of areas that span our local Comox Valley region all the way up to the national level and back down to the level that impacts us personally.

According to Statistics Canada, within Canada, the Finance, Insurance, Real Estate and leasing industry group accounted for about 1.1 million jobs in Canada during the first four months of 2014. This represents about 6% of all major industry group jobs in all of Canada and it does not include jobs in related groups such as construction.Think about how many related industries that there are, and the total numbers climb considerably. Real estate, also known as real property, can be found almost everywhere that we live, work, and play.

The real estate sector comprises a residential and commercial component. According to BCREA BCREA economics reports, the total impact of the real estate sector in BC is substantial. The residential sector is also significant. Most Canadians live in a home that is either rented or owned. By some estimates, the housing sector accounts for close to 19% of the Gross Domestic Product in Canada. Since Canada’s economy is roughly a trillion dollars, it is no surprise why so may analysts and news outlets focus and report on changes to the housing sector. Simply put, it is big business, and it is important to all of us as Canadians and our country. It is not just the figures that are important. The trend is also important. Spending on residential construction has increased significantly since the mid 1990s and as it does, the importance of this element of the housing market increases in importance and impact. As with just about all statistics, it is extremely important that the statistics be comprehensive and readily available if they are going to be used to provide an accurate picture of the housing market and its impact on the Canadian economy.

Statistics alone do not tell the whole story. Consider, for example, how well Canada fared during the 2008-2009 financial crisis compared to many other countries including the United States. There are a number of reasons for this. The Bank of Canada has kept its policy rate at 1% since 2010. By keeping this rate low, the mortgage rates available to consumers have been maintained at or near 50 year lows. This is good news for any person who is planning on buying a home. The current rates stand in sharp contrast to the rates that exceeded 17% in the 1980s. While these low interest rates are good news for consumers, they may also be one of the reasons that household debt has risen to record levels.

For many years, the Baby Boomers were viewed as a main driver of the housing market. With nearly 10 million Canadians aged 49-67 it is easy to see why. As people age and become more successful financially they are able to afford more. While this does not apply to all Baby Boomers, it does apply to a significant number of them. There is a newer generation that has been given the term Echo Boomer. This generation will play an increasingly more important role in the real estate market in the years to come. These people now aged 20-38 outnumber the Baby Boomers. While the tide has not yet turned in favor of this generation of Canadians having the biggest impact on the Canadian real estate market, the potential exists for them to do so in the next decade as many of the Baby Boomers retire and make changes to their lifestyles in, in turn, their housing needs.

We all go through a number of stages in life. As we go through many of life’s changes so do our real estate needs and wants. What is important to a young single person or a young married couple may not be important to a couple on the verge of retirement. For example, many older people prefer to live in a home on a single level with no stairs. To a younger person this may not even be a consideration let alone a need. Location is also important and location preferences may change as well. Remote rural locations may be attractive to someone now but later in life they may want or need to be closer to an urban center for health or other reasons.

Let’s turn briefly to demographic change in British Columbia. For the twelve month period ending January 1, 2014, there was an increase of just over 51,000 people to the province. Nearly 80% of the increase was due to international migration and the other 20% was due to natural growth. Inter-provincial migration actually accounted for a loss of nearly 4,000 people. While these figures maintained by BC Stats are interesting, they would be more useful if they also broke the numbers down by age for the reasons discussed above. Finding statistics that are relevant and useful to real estate can be a challenge. More than 50% of households had no children at home.

The same holds true In the Comox Valley. While several sources of demographic information are available for the Comox Valley, several refer to the Statistics Canada 2006 census. Eight year old statistics are not really relevant or useful if current stats are markedly different from those in 2006. At that time, the average age in the Comox Valley was about 44. Similar statistics are contained in a Statistics Canada report on the Comox Valley Regional District but the report also has a few predictions. Here are a few of the comments and predictions:

The population in the Comox Valley is estimated to reach over 88,500 by 2031 a gain of 23,000 (nearly 26%) from 2006;
The Comox Valley remains one of the fastest growing areas in the Province;
The Comox Valley added nearly 11 years to its median age over the past 20 years compared with a provincial gain of 7.2 due to its popularity with retirees and seniors. The median age in 2006 was 44 compared to about 40 in the province;
The total dependency ratio was nearly 59 in 2007 meaning that 59% of the population were either below or above the typical working age; and
Just over 60% of the population lived in either Courtenay (39%) or Comox (22%)

Each of the above Comox Valley statistics are interesting but are the meaningful? What is the basis of the population growth estimate? What are the assumptions? While the dependency ratio statistic is based on typical working age, what is actually happening vis-a-vis work and age, especially in the older population component? The report does not say nor does it provide enough detail to answer these questions. As well, while the report does focus a bit on the Baby Boomer generation (without actually using the term), it does not spend much time on the Echo Boomer generation. What is the forecast there? While climate and quality of life combined with a slower pace of life may attract Baby Boomers, what does and is being done to attract Echo Boomers?

When people buy homes in the Comox Valley, RE/MAX asks buyers to completes a buyer profile proving some information on why they chose to buy in the Valley. For example, it asks:

Are you relocating to the valley from outside of the valley?
What were the main reasons for relocation?
What was the main reason for purchasing real estate?

Here again, the statistics derived from answers to these general questions may or may not be useful. First, not all buyers fill them out. Second, there is no demographic age component. Third, the type of real estate purchase is not asked. Even if demographic information about factors such as age were asked it still may not be entirely useful. Why? Because there does not seem to be any standardized way of collecting and presenting the information. For example, an investincomoxvalley website presents age demographics broken down as follows: ages 0-19; ages 20-34, ages 35-49; and over 50. What is the basis for the breakdown and what is the relevance to the various age categories? To be meaningful, statistics must be meaningful in type and composition.

So what is really happening in the volume of affordable homes in the Comox Valley regional district ? To answer this question recent experience will be used. First of all, there will always be a local component to the real estate market. Some people are born here, grow up here, and eventually die here. As they do their personal and family needs often will and do change. What was good for these people when they were young may not even be suitable for them when they get older and their family grows. A common theme that I hear all the time from buyers is that they are looking for something that is updated and move in ready. While some people are willing to fix up things in a home or even update things in a home, many are not. As a seller, this is important information. Has your Comox Valley home been updated recently? Is it in need of any major repairs or maintenance? Here is an example. A number of people in Royston and areas south may have been waiting for decisions concerning the installation of a sewer system in their area so they have not kept up on the maintenance (or replacement) of their septic system. This is not a good idea. Most buyers will have a home and septic system inspection done on a rural Comox Valley property. Others will do much more to investigate and inspect the property before they buy. Increasingly, what used to be not that important in the past has become important. Permits are another area. For example, homes that have suites installed in them without the appropriate permits are becoming less and less attractive to many buyers.

Homeowner renovations are another area of increasing concern. While a particular homeowner may have the ability to carry out the intended renovations themselves, they should not be undertaken without the appropriate permits. Increasingly, buyers are not prepared to assume the risk and buy these homes. And by the way, the law requires homeowners to declare all latent defects associated with their home and property. The lack of a required permit is a latent defect under the law. This information must be provided to potential buyers. Some ask what about getting a permit after the fact. Ask this question of the local city, town or village planning department or of the Comox Valley Regional District planning department and see what you get for an answer. The answer may surprise you.

There are, of course, many other and different considerations that may affect a specific property. Urban and rural properties may have a few different considerations but many are the same in the eyes of the buyer. Sellers need to know their properties and homes and any potential issues that may affect resale and selling the home before they place it on the Comox Valley real estate market. Knowing is good, but having the documentation to prove it is even better. Being fore-warned is fore-armed when it comes to information about your home and property.

Comox Valley home buyers will ask a number of things about a specific property and they expect honest and complete answers. There may be some situations where the seller will not or cannot answer the questions. Foreclosures and estate sales often fall into this category of home sale. There may be other questions that the seller simply does not know the answer to but there are organizations and resources that are available to Comox Valley realtors who may be able to find out the answer for you. Consider a large rural property in the Comox peninsula. There may be parts of the property affected by things such as the Riparian Regulation, eagle nesting location and a number of other issues. Why is this important? Because some of these types of things can place restrictions on the future development of the home and/or property. They, among other things, may also affect the current value of the home and/or property.

Buying and selling Comox Valley real estate can be a fairly straight forward process but it can also be a very complicated and lengthy one. Homes and properties in the Comox Valley may have surprises waiting for the unsuspecting buyer. They may also have surprises in-waiting for the unsuspecting homeowner and seller. If you are planning to buy or sell a Comox Valley home, contact Brett to be your realtor and benefit from his many years experience as a professional.

Comox Valley Real Estate Permits

May 5, 2014 by Brett Cairns

Comox Valley real estate permits apply to a number of different situations. For example, the Town of Comox Building bylaw applies to the design, construction and occupancy of new Comox Valley real estate buildings and structures, and the alteration, reconstruction, demolition, removal, relocation and occupancy or change of occupancy of existing buildings and structures. The bylaw goes on to state that no person shall commence or continue any construction, alteration, reconstruction, demolition, removal, relocation or change the occupancy of any building or structure, including excavation or other work related to construction unless a building official has issued a permit for the work. The Comox bylaw adds that every owner shall ensure that all construction complies with the Building Code, the bylaw and other applicable enactments respecting health and safety.

The City of Courtenay Building Bylaw similarly was enacted to regulate construction within the City of Courtenay. Their bylaw requires that a permit is required whenever work regulated under the bylaw is to be undertaken. The Comox Valley Regional District Building Bylaw regulates construction with the regional district. All Courtenay homes on the market are subject to this bylaw.

So why is this important? Let’s say that, as a Comox Valley homeowner, you want to perform an alteration to your home. Before doing so, it is important to consult with local authorities on the application of the local Comox Valley building bylaw and the related permit. Having a permit for the intended work is only a step in the process. After work commences they may be one or more inspections of the work before the work is completed. The inspections are done consistent with the current British Columbia Building Code and the planned work.

There are other forms of Comox Valley real estate permits as well. Let’s say that, as a Comox Valley homeowner, you wish to install a secondary suite in your home that you can rent out in order to help with the mortgage. Does the zoning that applies to your Comox Valley property allow for a secondary suite in your home? What are the local regulations for secondary suites? Are you planning to do the work yourself or hire a professional to do it for you? If you plan to do it yourself, are you well versed with the requirements of the current Building Code?

In addition to the considerations already mentioned, there is another reason why having the required permits for your property is important. When you plan to sell your Comox Valley home, the lack of a required permit is known in the Real Estate Services Act as a Material Latent Defect that must be disclosed by law to Buyers.

Comox Valley Real Estate Communication

May 3, 2014 by Brett Cairns

Effective Comox Valley real estate communications are vital to the home buying process. The introduction of “smart phone” technology in the early 1990s brought with it new levels of technology for the general public. At the time “smart phones” were considered to be mobile phones with more computing capability than regular phones. Technological levels were elevated even more with the introduction of the I-phone in 2007. Like many others, Comox Valley real estate home buyers are able to use these revolutionary phones to call, email, and text from the same hand held mobile device. Even though we can do much more with their new mobile phones, not all features represented benefits. Why?

As with all technology, there are advantages and disadvantages. Being able to easily and nearly instantly connect with Comox Valley friends and others across the country and the world is seen by many people as an advantage. However, there are some disadvantages. One of the most significant is the creation of expectations that in many situations cannot be met. Merely having a phone that gives us the capability to call, text or email someone does not mean that the person on the other end will answer right away. The person may not have their phone on them. The phone may not be turned on. The person may be involved in an activity or sport and not have access to their phone. The person may not want to be disturbed. There are many other reasons why you may not get an immediate response to your text. Sending an email to someone in the Comox Valley is similar. If there is a lack of a response to an email or text you generally will not know why unless, in the case of an email, the email system is set to reply with an “out of office” response. When you phone someone, the result can be the same. You may or may not get an answering service message and be able to leave a message.

Let’s consider this in a Comox Valley real estate business setting. Let’s say you are working with a Comox Valley realtor and you are looking at options to buy a Comox dream home. Sending a text to your agent can be done easily and quickly. A response may come back quickly but then again it may not and you may or may not know why. The agent may be tied up with other clients and not want to disrupt them by responding to your text out of courtesy to the people that he/she is dealing with. The response may require some investigation by the agent in order to provide you with a reply. The response may require coordination with other people in order to obtain the other information or to coordinate an appointment that may be required.

As with most other business owners, Comox Valley real estate agents must deal with many different aspects of their business in order to be effective in business, and to stay in business. Marketing, finances, paying bills, coordinating services provided by third parties, dealing with other professionals such as home inspectors, mortgage officers and many others is just part of any business day. While Comox Valley real estate clients are very important, they are not the only people that Comox Valley realtors must deal with on a daily basis during the course of any business day. As well, like everyone else, these agents have families and friends that they wish to spend time with.

The next time you send a text or email to your Comox Valley realtor at 11pm at night or on a Sunday and you do not get an immediate reply, do not feel offended. While technology has enabled nearly immediate Comox Valley real estate communications, the expectation of an immediate reply should be tempered. A close friend may reply to your late night text but a business owner may not. Business have published hours to deal with customers and clients and they are often doing other business related things outside of these hours. They also have to find time for their family and friends outside of business hours as well. Clients and customers keep businesses in business. A work-life balance helps keep people healthy. Without health, business owners will not be in business.

There is nothing wrong with sending an email or text at any time of the day or night. When you do outside of normal business hours just do not expect an immediate reply unless you have previously coordinate a response with the person who must do the work or provide the information.

Comox Valley Real Estate Waterways

April 23, 2014 by Brett Cairns

One of the attractions of the Comox Valley is its variety of scenic waterfront homes and waterways. The Comox Valley is bordered on the East by the Pacific Ocean fed Strait of Georgia. Throughout the valley there are a number of scenic Comox Valley lakes, wetlands, rivers, streams and other watercourses that contribute to its overall natural scenic beauty. While each of these natural wonders may be aesthetically please to property owners, having such a watercourse on or near one’s property can limit the use or development of a property.

The Riparian Areas Regulation came into effect in British Columbia on the 31st of March 2005. It replaced the Streamside Protection Regulation. This regulation aims to protect Riparian Areas such as those in the Comox Valley during residential, commercial and industrial development. This regulation applies to the “Riparian Assessment Area (RAR)” adjacent to streams. the definition of a stream in the regulation is very broad. Streams includes a watercourse (whether it usually contains water or not), a pond, lake, river, creek or brook and a ditch or wetland that is connected by surface flow to a watercourse, pond, lake, river, creek or brook that provides fish habitat. Qualified Environmental Professionals can be hired in order to assess the impact to habitat, determine setbacks, and to identify measures that need to be employed to maintain the integrity of the setbacks.

So what does this regulation mean to the Comox Valley real estate market? If you are a Comox Valley real estate owner and if you have a watercourse on or near your property, your land may be impacted by this regulation. Some of the impacts may include, but are not limited to, the removal, alteration, disruption of vegetation, the disturbance of soils and the construction or erection of buildings and structures.

The RAR for a stream is 30 meters on both sides of the stream from the high water mark. For a ravine less than 60 meters wide, the RAR is 30 meters beyond the top of the ravine bank measured from the high water mark. For a ravine more than 60 meters wide, the RAR is 10 meters beyond the top of the ravine bank measured from the high water mark.

So if you have a stream, lake, wetland or ditch on or beside your Comox Valley property, this regulation may apply to your land. If you plan any Comox Valley residential, commercial or industrial development within 30 meters of a watercourse and you plan any of the following:

removing or altering plants
disturbing soils
constructing buildings and structures
constructing roads, trails, docks, wharves, and bridges
creating hard surfaces such as decks and pavement
installing works for flood protection
developing drainage systems and utility corridors
servicing sewage and water systems
servicing subdivisions

You will have to get your Comox Valley property assessed to determine the Streamside Protection Area on your property as well as the measures to maintain riparian fish habitat within the RAR.

Enjoy your Comox Valley watercourse but make sure that you are aware of the Riparian Area Regulation and whether or not it applies to your watercourse.

Comox Valley Home Foreclosures

February 20, 2014 by Brett Cairns

Comox Valley homes foreclosures are, unfortunately, a part of the Comox Valley Real Estate market. A home foreclosure is the legal process by which a mortgagee (lender) or other lien holder extinguishes the mortgager’s (borrower’s) right of redemption (the capacity to redeem the property and pay the loan). The borrower’s legal (contractual) right of redemption is already extinguished because the borrower has defaulted. Property foreclosure actions are commenced in British Columbia with a document called a petition. This action is normally preceded by a demand letter from the lender that gives the borrower a short period to pay out the mortgage or face foreclosure. The petition is followed by the first order of the court – the Order Nisi, which, among other things, establishes the amount required and time given to the borrower to redeem the mortgage.

While there are a number of remedies available for a home foreclosure, one of them involves a foreclosed property listed for sale as a court-ordered sale. This means that the sale of the property is carried out under supervision of the court and that the court must approve the sale. The property is appraised and then generally listed for sale with a real estate firm. Unlike most other Comox Valley homes for sale, a foreclosed home is advertised “as is, where is”. This means that prospective purchasers are responsible for undertaking the investigations necessary to satisfy themselves concerning the condition of the property. As well, no Property Disclosure Statement will be made available.

On any given day there are a number of foreclosures listed among the some home foreclosures in Courtenay. Should this cause concern? As with other Comox Valley realty listings, buyer’s should ensure that they gather as much information as they can on the property with the assistance of professionals in the respective areas so that they can be confident that they understand what they are considering buying and that their will be no surprises in the future. Even though the lender will not make any representations or give any warranties concerning the condition of the property, the listing real estate agent still has an obligation to disclose known latent defects of the property and that the disclosure be made in writing prior to acceptance of an offer (Section 58 of the BC Real Estate Council rules).

A few other things are different with home foreclosures. First, offers must provide for the lender to obtain court approval of the offer. Second, offers will have a Schedule A attached that comprises terms that replace, modify, and where applicable, override the Standard Contract of purchase and sale. Third, the completion date of an offer is based on a period of time after court approval (for example, two weeks). Fourth, when an offer is scheduled to be considered in court, other interested buyers may show up in court and present offers.

This short blog does not cover all aspects of a Comox Valley home foreclosure and it is not intended as legal advice – always consult a lawyer for legal advice. The blog is meant as informational so that readers will gain a basic sense that foreclosures are different than other real estate listings and sales. Whether or not they are viewed as a good or bad deal by prospective purchasers will depend on the individual circumstances at the time. Are you considering buying a Comox Valley home foreclosure? Contact Brett Cairns of RE/MAX Ocean Pacific Realty to find out how.

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