The Home Buyers’ Plan (HBP) is a program that allows you to withdraw up to $20,000 from your registered retirement savings plan (RRSPs) to buy or build a qualifying home for yourself or for a related person with a disability.

Conditions for participating in the HBP Only the individual who is entitled to receive payments from the RRSP (the annuitant) can withdraw funds from an RRSP. You can make withdrawals from more than one RRSP as long as you are the annuitant (plan owner) of each RRSP. Your RRSP issuer will not withhold tax on these amounts.

Generally, you will not be allowed to withdraw funds from a locked-in RRSP.

To participate in the HBP, ONE of the following conditions must apply:

• You are withdrawing funds to buy or build a home for yourself as a first-time home buyer.

or

• You are withdrawing funds to buy or build a home for a related person with a disability.

In addition, ALL of the following conditions must apply:

• You must enter into a written agreement (Offer of purchase) to buy or build a qualifying home. The agreement may be with a builder or contractor, or with a realtor or private seller. Obtaining a pre-approved mortgage does not satisfy this condition.
• You intend to occupy the qualifying home as your principal place of residence.
• Your repayable HBP balance on January 1 of the year of the withdrawal is zero.
• Neither you nor your spouse or common-law partner owns the qualifying home more than 30 days before the withdrawal.
• You are a resident of Canada.
• You buy or build the qualifying home before October 1 of the year after the year of withdrawal.

You are responsible for making sure that all HBP conditions that apply to your situation are met.

If a condition is not met while you are participating in the plan, your RRSP withdrawal will not be considered eligible. You will have to include the RRSP withdrawal as income on your income tax return for the year you received the funds.

If you do not meet the conditions to participate in the HBP in the current year, you may be able to participate at a later date.

Read more about HBP on Canada Revenue’s page.

What makes one house go on the market, have a number of showings in the first week and have a contract in place shortly thereafter, while an apparently similar house sits on the market for months? Of course, luck may have a little to do with it, but there is a good chance that the quick selling house (and its owner) was prepared to sell while the other house and owner were not.

Although pricing is a very important factor there are other issues that will have a great deal of effect on whether or not you have a quick sale.

5 Steps for Helping Your House to Sell Quickly

1. Prepare yourself to sell your house. Do your best to see the house, no longer as your home, but as a product to be marketed. This takes some work, especially if you have been in the home for a number of years and have many memories there, but it is necessary if you want to maximize your potential.
2. Consider a professional whole house inspection. An inspection will most likely uncover any major defects before they can cause trouble with a potential buyer. It also is a signal to buyers that you are a responsible seller.
3. Prepare the house. Stand back and look at your house as objectively as possible. Would you buy this home? Ask friends and neighbors to do the same, asking them to be totally honest. Overlooking flaws could cost you money! Get them fixed before you put the house on the market. 
4. Do what is necessary to make your house stand out from the competition. Make certain that your house is fresher, cleaner, and better maintained. Familiarize yourself with effective marketing and advertising techniques.
5. Remove most of the “imprint” that you have made on the house. Having a few family pictures around is fine, but if your house is a “shrine” to your family–walls full of personal pictures–you should take some steps to depersonalize it. Buyers must be able to envision themselves in the house, which is nearly impossible if everywhere they turn they stare at you!

Perhaps you’ve heard the terms “Freehold” or “Leasehold” to describe a person’s title to a piece of property and wondered exactly what that means.  The following is a list and explanation of the different ways Title to a property in British Columbia can be held.

Freehold – A freehold interest (also known as a fee simple) is the more precise term for what we ordinarily refer to as “ownership” of a home. The owner of the freehold interest has full use and control of the land and the buildings on it, subject to any rights of the Crown, local land-use bylaws, and any other restrictions in place at the time of purchase.

Strata Title – The strata title form of ownership is designed to provide exclusive use and ownership of a specific housing unit (the strata lot) which is contained in a larger property (the strata project), plus shared use and ownership of the common areas such as halls, grounds, garages, elevators, etc. This type of ownership is used for duplexes, apartment blocks, townhouse complexes, warehouses, and many other types of buildings. Because ownership of the common space is shared, the owners also share financial responsibility for its maintenance.

Leasehold – In some cases, you might purchase the right to use a residential property for a long, but limited, period of time. The owner of this right of use has a type of ownership called a leasehold interest. This type of ownership is used most often for townhouses or apartments built on city-owned land. It is also used occasionally for single detached homes on farm land, on First Nation reserves, and for apartments where the owner of the freehold interest of an entire apartment block sells leasehold interests in individual apartment units to other “owners.” Leasehold interests are frequently set for periods of 99 years, but regardless of the length of the original term, you will only be able to purchase the remaining portion. Of course, the shorter the remaining portion, the less you, or the person who eventually purchases from you, will be willing to pay for the leasehold interest.

Cooperative – In the cooperative form of ownership, each owner owns a share in a company or cooperative association which, in turn, owns a property containing a number of housing units. Each shareholder is assigned one particular unit in which to reside.

from the Real Estate Council of British Columbia 

If it is possible, as some individuals suggest, for many people to quickly become very wealthy by dealing in real estate, then unfortunately, other people on the opposite side of the same transactions must, just as quickly, lose some of what they have invested. Usually, those who stand to lose are sellers who agree to be a party to buyers’ financing arrangement in which the sellers assume risks.

Essentially, there is nothing wrong with most innovative or creative financing if all parties are fully aware of the potential risks and fully understand the possible consequences of such risks. However, the fact is that many owners (sellers) are not aware of the potential disasters which may occur. It is strongly recommended that you secure competent advice from a real estate licensee or legal counsel before finalizing any real estate contract. This recommendation is much more urgent when the offer you are considering includes terms which could jeopardize you financially.

Be wary of offers which require any of the following:

As you read and study about buying real estate, you will often find the words “house” and “home” used interchangeably. There is a huge difference between a house and a home.

A house can be a place to eat, sleep, park your car, and put all your “stuff” (including other family members). It is a material possession and an investment. A home is where you feel comfortable, warm, safe, and protected.

A home is where you live.

A house is something you buy logically. A home is an emotional purchase. When buying real estate you have to balance your emotional wants and your logical needs because there will almost certainly be a time when the two conflict.

Example
For example, you may want a house with a view, but the payment is higher than you feel comfortable with on a thirty-year fixed rate mortgage.

What do you do?

Purchase the house anyway and budget more carefully for the next few years? Buy the same house without the view and get it cheaper? Make a larger down payment by borrowing from your 401K or family members, so you get a lower payment? Get an adjustable rate mortgage with a smaller payment instead of a fixed rate loan? Or buy a smaller house and still get the view?

When viewing the house, most people look at it emotionally and envision it as a safe, happy, comfortable home. Later, when making the offer or filling out a mortgage application, your logic may begin to kick in, instead. That’s when “buyer’s remorse” may come up, but…that’s a different article.

Balancing Act
The trick in buying real estate is to view all decisions with both a logical perspective and an emotional perspective. If a situation presents itself that requires a trade-off, decide on whether there is a huge conflict or a small one. Logic should win the big conflicts, but emotion should always be a factor, even winning the small ones.

You will find yourself owning a warm, happy, safe home – and an investment for the future at a price you are willing to pay.

Homeowners are now eligible to receive a full grant with property values up to $1,050,000, up from the previous threshold of $950,000.

With the basic grant homeowners can receive a maximum residential property tax reduction of $570. An additional grant of $275 is available for owners who are over the age of 65, permanently disabled or eligible to receive certain war-veteran allowances.

The 2007 budget extended the additional grant to low-income homeowners who also meet the above eligibility criteria regardless of the assessed value of their home.

Residential property values in British Columbia, including new construction, have increased by 16 per cent over the past year.

From Canada Mortgage and Housing Corporation

VANCOUVER, November 2, 2007 — Demand for homeownership will keep housing starts and existing home sales at above-average levels in BC and Vancouver, and push new and existing home prices higher in 2008.

“Housing starts in BC will top 33,250 next year down slightly from this year’s level but still above average levels”, noted Carol Frketich, BC Regional Economist. Factors behind this demand include: unemployment near record lows, strong employment growth, rising wages, relatively low mortgage rates and growing migration. Recent financial market turmoil in the United States will keep interest rates relatively flat in Canada despite upward inflationary pressures.

“In Vancouver, housing demand will be supported through 2008 by ongoing job growth and a steady flow of people moving to the region” said Robyn Adamache, CMHC’s Vancouver Senior Market Analyst. Solid home price gains will continue to attract investors and live-in homeowners alike. These factors, combined with Vancouver’s growing international reputation as a clean, liveable city, will keep demand for new and resale housing robust. Both new home starts and existing home sales will stay near record highs, but edge down slightly in the year ahead. Look for new and resale home prices in Metro Vancouver communities to increase, but at a slower pace than in recent years.

SOURCE: CMHC Housing Market Outlook, British Columbia Region Highlights, Fourth Quarter 2007.

Grants for Residential Property Owners: ecoENERGY Retrofit – Homes is available to owners of single family homes including detached, semi-detached and low rise multi-unit residential buildings. Property owners can qualify for federal grants by improving the energy efficiency of their homes, and reducing their home’s impact on the environment. The maximum grant one can receive per home or multi-unit residential building is $5,000; whereas the total grant amount available to one individual or entity for eligible properties over the life of the program is $500,000.

Who is eligible for grants?

For full details on eligibility, consult your local NRCan-licensed service organization or click here to visit the Goverment of Canada’s website for more information.

Here are the main criteria:

You can apply for a grant for a property that you own and live in or rent out. This includes detached, semi-detached and row houses and low-rise residential buildings of three storeys or less (with a footprint of less than 600 square metres), as well as mobile homes on a permanent foundation.

Grants are available for work done within a specific time frame, so it is important to talk to your local service organization about the eligibility of your house as soon as you are ready to plan and undertake your energy efficiency retrofits. You have 18 months from the date of your pre-retrofit evaluation to complete the work and qualify for a grant.

Only homes that have undergone a pre- and post-retrofit residential energy assessment service by an NRCan-licensed advisor will be eligible. You will be able to apply only once per property.

Homeowners must carry out specific improvements in order to qualify for a grant. NRCan-licensed energy advisors will be able to tell you which retrofits have the greatest impact on your home’s efficiency. The greater the improvement, the more the grant will be.

It is you – the property owner – who decides what retrofits recommended by your energy advisor you wish to undertake. You are responsible for choosing a contractor and for ensuring that the work is performed properly. It is important that you get a detailed written contract between you and your contractor in order to prevent problems later on. The residential energy assessment service does not assess the quality of the work performed – it evaluates only the retrofit’s impact on the energy efficiency of your home.

How do you apply for a grant?

It’s easy. Your energy advisor will apply for the grant on your behalf after you have completed the energy efficiency retrofits and your home has been re-assessed. Your advisor will prepare the paperwork for you to sign and will be able to tell you exactly how much you can expect to receive. Your energy advisor will then forward your application to NRCan.

A table of retrofits has been established to show the payment for the completion of each recommended upgrade. The grant amount has been determined by the relative effectiveness of that particular upgrade in reducing energy or water use, and not directly on the cost of the upgrade, which will vary depending on location, local pricing and labour costs, size of house, etc. Note: Refer to Retrofit Your Home and Qualify for a Grant! for grant amounts related to retrofits.

A grant application must be submitted to NRCan no later than 18 months after the date of the pre-retrofit evaluation. You can expect to receive your cheque within 90 days of your follow-up evaluation.

Click here to visit the Goverment of Canada’s website for more information.

WORKING WITH A REAL ESTATE AGENT

Buyers and sellers are presented with this brochure at the earliest contact with a real estate agent. Industry regulations have now made it mandatory for agents to explain at the beginning of the client relationship the options of agency representation you have, and to disclose the capacity in which the agent will be working with you: i.e. as a buyer’s agent, a seller’s agent, as a sub-agent to the seller, or as a dual agent. The agent will then ask you to sign a statement acknowledging that this disclosure of agency representation has taken place. He or she will then tear off and keep the signed statement and give you the brochure for future reference.

Signing the disclosure statement in the Working with a Real Estate Agent brochure does not bind you to any obligation to that real estate agent. It merely confirms that you have discussed your agency representation options with the agent. You will have a contractual arrangement with your agent when you sign the listing agreement (as a seller) or the exclusive buyers’ agency agreement (as a buyer).

MLS® LISTING CONTRACT

The Multiple Listing Service® Listing Contract outlines the terms of the listing contract, including the length of time for the listing, the price, the commission to be paid, all the parties to the listing, the address and the legal description of the property to be sold, how the seller is to be paid, the preferred possession date, the financial obligations, and other information regarding the property.

The listing agreement is the seller’s agreement with the listing agency, not the salesperson individually. If the salesperson leaves that company, it is up to the seller and the listing company to decide whether or not the listing will go with the salesperson, or whether it will stay with the original company and be assigned to another salesperson.

The standard MLS® Listing Contract explains that the seller is liable to pay a commission if the listing agent or a cooperating agent brings an offer which meets all of the stated terms and conditions of the seller.

As with other services, there is GST (but not yet PST) payable on commission, so when you are calculating your proceeds, take that into consideration.

DATA INPUT FORM

The Data Input Form is the sheet the REALTOR® fills out with all of the information about the property, such as number and size of rooms, lot size, construction type, house style and more. The data is entered into the MLS® database, where other REALTORS® are able to search for specific criteria. As well, this form includes any descriptive comments that will be included for the public websites or private comments, only for other REALTORS®.

EXCLUSIVE LISTING CONTRACT

The Exclusive Listing Contract is used when a property is not going to be on the Multiple Listing Service®. The listing is publicized by advertising and the sign alone, without the benefit of the catalogue/computer. At times, the seller will prefer an exclusive listing in the belief that there will be fewer “lookers,” rather than buyers. Actually that is not the case. An exclusive listing is often overlooked by REALTORS® working with buyers, because the first place they look is in the MLS® catalogue/computer. The more people who know about a property, the greater the chance of a larger number of serious buyers viewing the property and making offers until the acceptable price and terms are reached.

LISTING AMENDMENT

A Listing Amendment form is used whenever a change is made to the original MLS® or Exclusive Listing Contract. This may involve extending the date, changing the price, altering wording on the print-out, correcting measurements or tax or financial information, etc. It must be signed by all owners, as on the original listing contract, as well as by the manager of the listing agency.

LISTING CANCELLATION

From time to time a listing is cancelled for various reasons. The Listing Cancellation form used in most areas has a preprinted clause which states that if the property sells within 60 days of cancellation, or before the natural expiry of the listing (whichever comes first), the seller is liable for commission. The reason behind this clause is that, at times a seller may be told by a buyer to cancel the listing so that the seller will not be liable for the commission and the buyer will pay less. This dishonest approach tries to cheat the REALTOR® out of a commission, even though the REALTOR® may have spent hundreds of dollars on advertising and hours at open house and other showings trying to sell the house.

If the seller is very dissatisfied with the service of a REALTOR®, the seller should speak to the manager of the listing agency and outline his/her concerns. The listing agency will make every effort to achieve satisfactory results.

HOLD ACTION FORM

At times, it is necessary to stop the marketing of a property for awhile because of illness or other personal circumstances of the seller. By definition, when your home is listed on MLS®, all REALTORS® have an opportunity to find a buyer for your property. The Hold Action Form communicates your wishes to all REALTORS® who have access to MLS® that you wish to delay the sale of your home.

PROPERTY DISCLOSURE STATEMENT (PDS)

Every residential listing placed on the MLS® must be accompanied by this form which is filled out by the seller and signed, as acknowledgement, by the buyer. If the signed PDS is not submitted to the real estate board with the listing contract, the listing will not be placed on the MLS®. The seller indicates his knowledge of various aspects of the property, defects of which he is aware, and any upcoming expenses, (as in special assessments in strata-titled properties).

The REALTOR® is not permitted to fill out the form. The REALTOR® will keep a copy, and may file a copy with the MLS® listing at the real estate board, but it goes no further. The buyer receives a copy after signing and dating it. The form does not cover every aspect of the property. A buyer is still advised to consult an independent inspector if there are questions or concerns that are not adequately answered.

LIMITED DUAL AGENCY AGREEMENT

This form is used when the agent represents both the buyer and the seller in a single transaction. It is used when the situation involves either one salesperson who represents both the buyer and the seller, or when two salespersons from the same company are involved.

This agreement modifies the prior Listing Contract and the Buyer’s Agency Contract (or verbal buyer’s agency agreement) and gives the agent the authorization to represent both parties in a limited capacity. It authorizes the agent to maintain both parties’ confidences regarding motivation, negotiating positions and personal information (unless either party gives the agent written permission to disclose such information).

CONTRACT OF PURCHASE AND SALE

The Contract of Purchase and Sale standard form is the basic contract signed by the parties (the sellers and the buyers). It outlines every aspect of the transaction, including the price, the terms and conditions, the dates, the inclusions and exclusions, the handling of existing tenancies, the deposit and increase (where applicable) and other legal matters as described in the preprinted contract and added as clauses.

ADDENDUM (WITH PRINTED CLAUSES)

The basic contract will be accompanied by a special addendum form with preprinted clauses where there is either financing to be cleared from the title before the seller can provide clear title, or where there is financing to be put into place after the title is registered in the buyer’s name.

ADDENDUM (WITHOUT PRINTED CLAUSES)

The basic blank addendum for is used to write additional clauses on the contract when there is not adequate space to do so on the contract itself. When that has been done, the buyer signs this form indicating that this clause is being removed.

AMENDMENT TO CONTRACT OF PURCHASE AND SALE

This form is used to remove conditions (subject removal) when they have been satisfied, as in the situation where a buyer has to find financing by a certain date.

OTHER DOCUMENTS

Leases

Usually leases are used more in commercial transactions than in residential ones, but you may be a landlord or a tenant who prefers to use a lease for a specified time period for any number of reasons, including stability of tenure. A commercial lease is very involved and should be drawn up by a specialist in the commercial field and reviewed by a lawyer for each party. A residential lease is less complex and normally involves little more than a standard rental agreement with an outline of the rules and regulations of the building or complex, or expectations of the owner and tenant above and beyond what the Residential Tenancy Act sets out. If you have any doubts about how to draw a lease or how to interpret specific clauses, consult a lawyer or a REALTOR®.

Mortgages

Mortgages come in a wide variety of formats, depending on the lending institution. Now, many institutions use a simplified form and make reference to the larger form where any deviations from clauses in their standard form may occur. The buyer should check that the document matches the commitment letter they have signed outlining the terms, including the interest rate, the term, the amortization period, the prepayment privilege (”penalty”), the options (if any) for increasing the number of payments or making lump sum payments, the assumability of the mortgage if the property is sold, and the portability of the mortgage if the seller wishes to use it on another property.

If you are a seller who is carrying financing for a buyer of your property, make sure that your lawyer reviews the documents before you sign them. If you are a buyer who is asking a seller to carry financing, make sure your own lawyer reviews the documents as well. Many serious issues may arise where the parties are unfamiliar with the law concerning mortgage financing.

Realtor Code of Ethics

CREA’s Code of Ethics and Standards of Business Practice has been the measure of professionalism in organized real estate for over 40 years. The first code was approved in 1913 at the convention of the National Association of Real Estate Boards held in Winnipeg. The first Code of Ethics specifically prepared for members of The Canadian Real Estate Association was approved by members in 1959.

The Code establishes a standard of conduct, which in many respects exceeds basic legal requirements. This standard ensures that that the rights and interests of consumers of real estate services are protected. As a condition of membership, all REALTORS® agree to abide by the Code.

Some of the requirements of the Code include:

1. REALTORS® must disclose in writing whom they are representing as an agent in the transaction. Parties to a transaction must be told what their agency relationship is to the REALTOR®.
2. Definitions, terminology and presumed agency relationships vary from province to province. Most jurisdictions have their own forms for complying with disclosure requirements, which have been drafted to accommodate agency relationships as they exist in your province or territory.
3. All financial arrangements between REALTORS® and others (e.g. referral fees, compensation from more than one party, rebates or profits on expenditures) must be fully disclosed to clients;
4. REALTORS® cannot acquire an interest in property (either directly or indirectly) without disclosing the fact that they are real estate professionals;
5. REALTORS® cannot use the terms of an agreement of purchase and sale to negotiate commission.

While the Code of Ethics establishes obligations that may be higher than those mandated by law, in any instance where the Code of Ethics and the law conflict, the obligations of the law must take precedence.

A REALTOR®’s ethical obligations are based on moral integrity, competent service to clients and customers, and dedication to the interest and welfare of the public. The Code has been amended many times to reflect changes in the real estate marketplace, the needs of property owners and the perceptions and values of society. For more than forty years, through a variety of updates, the CREA Code of Ethics is unchanged in demanding high standards of professional conduct to protect the interests of clients and customers and safeguard the rights of consumers of real estate services.