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• Comox Valley Homes – Lowest Cost or Best Value?

Comox Valley homes are available in a broad range of prices and values. When you look for homes what do you focus on? Do you look at price as a deciding factor? What about value as a deciding factor? The two concepts can be quite different when looking at specific types of homes. For example Crown Isle homes with a view of the Glacier may be among the most expensive but they can also represent great value because of the way that they are built. Let’s look at some issues related to this real estate consideration.

According to the International Monetary Fund (2010), World Bank (2009) and CIA World Factbook (2010), Canada’s Gross Domestic Product (GDP) is ranked number 14 in the World when based on Purchasing Power Parity calculations.On the 17th of June, the International Monetary Fund adjusted its 2011 GDP expansion forecast for Canada upward slightly to 2.9%. Clearly, Canada’s contribution to the world economy is significant.

Within Canada, according to a 2008 House of Commons Report (Standing Committee on Industry, Science, and Technology dated 17 June 2008), Canada’s services sector accounts for almost 70% of the GDP and employs more than 75% of Canadians. Statistics Canada considers real estate to be a part of the 15 service-producing industries listed in the North American Industry Classification System. Accordingly, homes and properties are very important to us in Canada and us in the Comox Valley. Waterfront homes for sale are among the most sought after.

Ben Rabidoux, a college professor and financial advisor based in Canada, provided an excerpt of his forthcoming book The Role of Housing in Boosting GDP, on his blog The Economic Analyst. He provides statistics that show that the construction of residential real estate has accounted for 6.5% to 7% of GDP over the past 5 years. His figures are consistent with those of the Bank of Canada which state that residential investment has accounted for 6 percent of GDP on average over the past 30 years. Perhaps more striking are the statistics that show that the contribution of the Financial, Insurance and Real Estate industries has increased from 19% to more than 23% over this same period; striking because of the impact of changes in the housing market on all of these industries.

Based on the above statistics it should be clear that real estate is important to Canada and the health of its economy. For most Canadians, real estate is their most important investment. Comox Valley real estate investment is no different. Why then, do some people take risks with this investment when they decide to sell it?

There are risks to almost everything we do in life, but risks can be addressed and reduced with proper planning, and by hiring the right professionals for the job. Would you try to treat yourself if you were dealing with an important medical issue? Would you try to sell your home yourself if you did not have the requisite education and training, and an up-to-date understanding of the legislation that affects real estate transactions? If you do what are the risks? Comox Valley real estate agents are licensed professionals who are educated and trained in real estate transactions. While all have to meet a minimum standard to become licensed, there are differences, in terms of the level and types of services, that they provide to clients.

When a person searches for a real estate professional to provide them with the services necessary to sell their home, do they look for someone based on a cost-centred or a value-centred approach? A cost-centred approach focuses on the lowest cost. However, lowest cost does not necessarily mean, and often does not mean, best value, or most effective. For example, if three different real estate agents all charge the same fee, it will be the one who provides the best, and the most effective service who will provide you with the best value.

When different Comox Valley realtors provide different types and levels of service for different fees, determination of best value will be more difficult to calculate, and it will often depend on things like the success rate of the person being hired (does the person just look for Comox Valley real estate listings and hope others will find a buyer or does the person focus on selling what they list?), the quality of the services rendered, the person being available when you need them(what hours and days are they prepared to work?), and the attention given to you (do they return calls and emails promptly when they are not with other clients?). Ask questions about exactly what services you will be offered, and read the fine print of the contract before you sign it. If something in it does not make sense, clarify what is meant and why. Perhaps even more important – will they tell you what you need to hear to sell your home, and not just what they think you want to hear for them to get the listing? Will they high ball the price to get the listing, and then work you down on the price because it is priced too high to sell? Being better informed helps be better prepared. Comox Valley home buyers and sellers can both benefit from a great local realtor.

Lowest cost or best value? The choice is yours. Do your homework before selecting a real estate professional. Determine what is important to you. Do you need to sell in a specific amount of time? Think back to previous experiences. How many times in life have you found that you only get what you pay for? What is true in life is also generally true in real estate.

If you are looking to buy or sell a Comox Valley home, contact Brett Cairns of RE/MAX Ocean Pacific Realty to make an appointment with me so we can discuss how he can help you meet your real estate needs.

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• Do You have a Dream Comox Valley Rural Property?

Comox Valley rural properties range from plots of land to acreages with Executive country homes built on them. They can be found among the courtenay rural real property listings that are for sale as well as in other rural areas of the Comox Valley. People who are considering the purchase of a rural property will generally have to consider and investigate more factors than someone whose focus is urban properties. While individual needs will vary based on the real estate requirements of each individual, there are some basic considerations that will generally be applicable to most individuals.

One of the most basic issues concerns the availability of water to service the property. Is there a well on the property? If there is, the well record is a good source of information. Is the well shared or is it privately owned? Was a comprehensive water test completed on the well? When was the last water well inspection report? If there is no well, what will it cost to provide water to the property? To find out one may have to consult a water dowser to find water, a driller to drill, and a well pump installer to install. When water is not provided by a well or municipal/regional source, but it is being provided by surface water such as a lake, is there a water license? A competent real estate professional should know what questions should be asked, and where to find the required information.

Another basic issue concerns the availability of a septic system to service the property (assuming that the property is not serviced by a sewer system). For Vancouver Island, the Sewerage System Regulation is currently monitored by the Vancouver Island Health Authority. Contemporary septic systems can be one of three different types installed by a Registered Onsite Wastewater Practitioner (ROWP). Systems installed before and after May 2005 have different documentation requirements. Knowing what these are is important so that the right questions can be asked about the system that is in place on the property. It is also important to know the costs associated with installing and maintaining a septic system. They will vary according to individual circumstances, but they will include installation costs (applicable if the current system needs to be replaced), inspection costs, cleaning and routine maintenance. A ROWP can be hired to inspect the current system. If a septic system has to be installed or replaced, the cost to do so can be fairly significant.

There are, of course, many other things that may need to be investigated to provide the prospective purchaser with the information that they will need to confidently purchase the Comox Valley property that meets their needs. Failure to fully investigate pertinent details may result in a surprise later by some fact uncovered after the purchase that affects the enjoyment and planned use of the property. Most of us do not like these kinds of surprises so it is better to ask questions before an offer to purchase is made, and especially before it becomes unconditional.

Clearly this short blog cannot address all of the issues that may pertain to Comox Valley rural properties, nor is it my intention to do so in this forum. Competent real estate professionals should be able to help prospective purchasers of rural properties by providing advice on the types of issues that should be investigated, both from the perspective of the purchaser’s real estate needs, and of the property being considered. Don’t be afraid to ask as many questions as are required to uncover pertinent facts so that future surprises can be minimized. It is better to ask a question before a purchase than to say after a purchase “I should have asked that”.

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• What is a Comox Valley Real Estate Power of Attorney?

A Comox Valley real estate Power of Attorney is a legal instrument that is used from time to time. Consider how difficult it would be to buy or sell a Comox home if you were not available, or accessible, for some period of time. There are some situations and circumstances that may prompt a buyer or seller of a home or property to consider appointing someone to act on his or her behalf for the purpose of conducting a real estate transaction. Here are just a couple of examples. You either want or need to sell your high end full featured Crown Isle home, but you are scheduled for an upcoming major surgery that will require a fairly significant period of recovery. You either want or need to sell your home, but you will be away on holidays in a remote location (such as the West Coast of Vancouver Island) where you may not have have access to communication utilities such as a phone, cell phone or the internet. What do you do?

One potential option is a Power of Attorney. A Power of Attorney is a written authorization to represent or act on someone’s behalf in business, private affairs, or some other legal matter. For example, a Power of Attorney could be drawn up by a lawyer or notary for a person to sign on behalf of another person for the purchase of a home or property. Your Comox Valley lawyer or notary will be able to explain the benefits and potential disadvantages of signing a legal document such as this.

When it comes to the use of such a document for the purchase or sale of Comox Valley real estate, the Power of Attorney must be in proper form. Seek the advice of a lawyer or notary to ensure that the form of Power of Attorney is valid and acceptable for Land Title purposes.

In addition to the Power of Attorney being valid, and in acceptable form, there is an accepted correct way of signing a real estate document on behalf of another person using a Power of Attorney. The Real Estate Council of British Columbia disseminates information in this regard, and your real estate agent should be able to provide you with it.

While a Power of Attorney may be valid and in proper form for Land Title purposes, this does not necessarily mean that all other organizations that may be involved with elements of the transaction will accept the document. It is always prudent to check with them first before planning to use it for purposes other than Land Title registration. For example, if you plan on signing mortgage documents related to the real estate transaction on behalf of someone else using the Power of Attorney, will the mortgage granting organization accept its use for that purpose?

A Power of Attorney can be used effectively for a real estate transaction when a person’s individual situation or circumstances merit consideration of its use. However, it is important that legal advice be sought by the person contemplating the use of such a legal document. Become fully informed before authorizing someone to act on your behalf for a real estate transaction.

Contact Brett Cairns of RE/MAX Ocean Pacific Realty to discuss how he can help you meet your real estate needs.

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• What are Comox Valley Real Estate Agents

Comox Valley real estate agents vary in their character, competence, and experience. For more than 40 years, I have observed that people possess various motivations, and that they also possess a variety of levels of knowledge, practical life experience, and competence in what they do in life. Real Estate Agents are no exception.

Before a real estate agent can apply for a license they must pass a licensing exam. If you are dealing with an agent who is relatively new, would you rather have one who barely achieved a pass on the exam or one who did very well? In order to maintain their license, a Comox Valley real estate agent must complete a specified number of continuing education courses. Would you rather deal with an agent who attends the minimum number of courses or one who is constantly working at acquiring additional real estate knowledge through a variety of means that include self study?

While practicing, real estate agents are called upon to provide advice on real estate matters. Would you rather deal with one who tells you what they think you want to hear in order to get a listing, or one who truthfully tells you what you need to hear to sell your home? Comox Valley agents use a variety of means to market your home. Given the emergence of the internet as an important medium through which buyers first start to look for a home, would your rather deal with an agent who is internet savvy and has a website that ranks high in internet searches or one who does not have a website (or a website that performs poorly in internet searches)?

Many Comox Valley property agents have a listing presentation that they present to sellers in order to compete for a listing. Would you rather hear from several agents to see how their approaches compare, or merely select one without having seen first hand how they compare to others?

Technology has become increasingly important in real estate. Would you rather deal with an agent who employs technology appropriately and effectively, or one who is technologically challenged?

Personal and professional networks are important in real estate. Would you rather engage an agent who is connected or one who is not?

Thoroughness and attention to detail are often hallmarks of an effective real estate professional. Would you rather deal with an agent who does only what is required by legislation, or one that goes well beyond what is necessary to provide you with great service?

Knowledge is gained over time through education, training and experience. Would you rather deal with an agent who has limited life experience and life skills, or one who has faced and overcome a wide spectrum of challenges in life, and who has highly developed life skills and an extensive breadth and depth of life experience?

While there are exceptions, many real estate transactions are the result of time and exposure in a given market. Would you rather deal with an agent who ensures that you get personalized attention and regular and timely communication from them, or one who only contacts you when they have something to report or not report at all unless you chase them?

Motivation is a very important aspect of real estate. Real estate agents will ask questions to determine the motivation of buyers and sellers, but who is asking questions to determine what motivates the agent? Would you rather deal with an agent motivated by providing service as a top priority, or one whose prime motivation is making money?

Clearly, these are only a few of the many questions that a person could ask themselves when considering a real estate estate to represent them either as a buyer’s or seller’s agent for the purchase or sale of a home. The time taken to think about what is important to you before embarking on this process may be time well spent. Each of us has different standards and expectations. Do your research, ask questions, and talk to several agents before choosing. When I was a young client I did not do this, and I should have. There are some great agents out there. Some are well known and some are not. By better understanding their motivation, life experience, and approach, you will be better informed so that you can hire the one that is right for you.

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• The Comox Valley and Real Estate TV – Is it Real?

Comox Valley real estate experiences are real. But are those that appear on real estate reality TV? During the past few years “reality” television shows have appeared in many different forms. Among them are shows that focus on homes and properties. While many of them offer entertainment value; some even offer good tips for homeowners, and buyers and sellers of real estate. However, some also present bad information when it comes to Comox Valley real estate. Competent and well informed licensed Comox Valley real estate professionals can provide you with valuable information in this regard.

For example. some of these shows discuss the purchase price of a home within the context of a budget to renovate the home. Unfortunately, the discussions always focus on financial simplicity and they leave out information that is important to real buyers of homes. A recent episode of a show I watched discussed having a budget of $700,000 to buy and then renovate a home. The purchase price of the home was $620,000. The show presented the renovation budget as merely the difference between the budget and the purchase price.

Not so fast. While this type of representation may be acceptable for television, it is not acceptable for a “real” real estate transaction. Before any prospective buyer starts looking at all the best local Courtenay homes for sale, they would be familiar with all of the typical costs associated with the purchase of a home. For example, in British Columbia, the property transfer tax levied on the purchase of real estate is significant. Other costs include those associated with legal fees, costs associated with a mortgage, home inspection costs, etc. In total, these costs often represent thousands of dollars. Ask your Comox Valley realtor about the types of costs that could be applicable in your specific circumstance.

A second example of false reality in some of these shows concerns the investment and subsequent return on investment of the renovations made to a home. While watching one particular show, the following example was provided. The market value of the home before renovations was $450,000. Renovations that cost a total of $40,000 were made to the home and the home was valued at $520,000 after renovations. This would be very, very, rare in real life. The Appraisal Institute of Canada provides some statistical information that provides a sense of the actual return on investment for specific renovations in a home.

While some types of renovations may realize significant returns on the investment, others do not. In fact, some types of renovations could actually realize a loss according to the statistics gathered and presented by the AIC. Even these statistics, when applied in isolation of other market elements, may be misleading. A competent real estate agent should have all of this information available (or be able to obtain it) for his/her clients. Just because a Comox Valley home seller spent $40,000 on renovating a spectacular Crown Isle home does not mean that the home is worth $40,000 more in a specific market.

These two examples are provided merely to inform of the potential risks that prospective Comox Valley home buyers or sellers of real estate could take by drawing any conclusions about real estate, and real estate transactions, from television shows. Consult a competent and well informed real estate agent, and other competent and well informed real estate professionals for advice in their respective areas of expertise. Being better informed is a part of being prepared when it comes to the renovation, purchase, or sale of homes. If you are considering buying or selling real estate in the Comox Valley, and you need real estate advice call or email me to book an appointment with me. I would be pleased to help you with your real estate needs.

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• How Much is my Comox Valley Home Worth?

How much is my Comox Valley home worth? This is one of the often most asked questions that I receive as a real estate agent in the Comox Valley. Before discussing this issue, let’s first look at the difference between cost, value, and price.

The cost of a home is what you paid for it. The value of your home at a specific point in time can be described in a number of different ways, and I will discuss several of them in this blog. The price of a Comox Valley home is generally what a seller is asking for the home when they place the home on the real estate market to sell. Comox real estate listings are not all priced properly. Let’s briefly discuss the following three types of valuation of a home: appraised value; value to owner; and market value.

Appraisals of homes are often undertaken by certified appraisers for a variety of reasons that include such things as : valuation for tax purposes; valuation for mortgage lending purposes; and valuation for sale upon foreclosure. When valuations are done for tax purposes, the appraiser is guided by provisions in the relevant Acts. When valuations are done for mortgage lending purposes, lending value is generally defined as a long-term conservative estimate of market value. When a valuation is done on a foreclosed property, the appraised value will have been undertaken at a specific point in time. Based on this brief discussion of home appraisals, it is easy to understand why the various types of appraisal mentioned could result in different dollar values estimates pertaining to the same home.

Value to owner is more difficult to quantify because of the many elements that may go into what a specific owner deems valuable in the home. The owner may have paid a certain amount of money to build or buy the home, and subsequently may have invested additional money in the home through various renovations. The owner may have some sentimental or emotional attachment to a feature or features in the home that they believe makes the home more valuable. Each of these factors may have a bearing on what the owner believes is the value of their home.

For the purchase and sale of real estate, only the market value of a home is most relevant. The market value of a home is determined by the real estate market (not by the person doing the market assessment). Market value is based on recent sales prices of similar homes in the same neighborhood. What constitutes recent, similar and same can vary according to the specific location and real estate market within which the home is situated. It is often said that all politics is local. With real estate, market value is often very local.

So what is my Comox Valley home worth? It is worth what home buyers are willing to pay for it on the real estate market. It is important to realize that just because a home is listed on a specific real estate market by a real estate agent, it does not mean that the home is listed at market value. Sometimes Comox Valley waterfront homes will be listed above, at, or even below market value. Why they choose to do this is often as varied a reason as the people are individuals. For example, an investor who is in no hurry to sell a home may choose to “test’ the market and list above the market to see how much they can get for the home. Someone who has to sell in a hurry may list below the market value. Whatever the reason, it is always wise for a buyer to know the market value of a home before they decide to make an offer on a home. Similarly, it is wise for a seller to know the market value of their home before they decide to list their home.

While the determination of a home’s market value may seem straight forward, this is not always the case. Ask three Comox Valley real estate agents what the market value of your home is and it is possible that you may get three different figures. Ask your real estate agent to explain in some detail how they came up with the market value. Sellers may wish to ask more than one agent for an assessment of market value and how they determined the market value in order to assess the rigor that the agent applied in the determination. I am more than happy to explain the process that I use. Should you wish to discuss the market value of your home in the Comox Valley, contact Brett Cairns of RE/MAX Ocean Pacific Realty.