BC Notaries’ Bust Common Home Buying Myths

Advice for Buyers and Sellers on Cusp of Busy Spring Market 

February 23, 2015

Vancouver, BC – BC Notaries are already seeing signs of a strong Spring real estate market on the horizon. With record low interest rates continuing for the foreseeable future, first-time home buyers and investors are increasingly attracted to the market. Vacancy rates for rentals are very low and rents continue to increase year-over-year further boosting enthusiasm among renters looking to buy, and buyers looking to rent.

The BC Real Estate Association (BCREA) recently reported the total sales dollar volume for January 2015 has increased 8.3% compared to the same time last year, with 4,377 residential units sold province-wide. It is predicting modest overall annual increase of 2.4% this year. While growth in Northern B.C. and the Kootenay, Okanagan and Interior regions may be limited due to the downturn in Alberta, this has no anticipated impact on real estate markets in Greater Vancouver, Victoria, the Fraser Valley and elsewhere.

“Spring is just around the corner, and Notaries are already seeing an increase in real estate transactions,” says Wayne Braid, CEO of The Society of Notaries Public of BC. “Low mortgage rates, strong population growth, solid job markets, and retirees moving West to escape long winters are creating continued housing demand for homes and rental properties.”

BC Notaries provide conveyancing expertise on more than half of all real estate sales and purchases in B.C., and related real estate-related services to many home buyers and sellers. Spring is a particularly busy season for those services. These aspiring new homeowners—whether young couples, singles, or families—often ask Notaries for trusted guidance on their important purchase. As such, Notaries frequently help dispel common real estate myths for their clients.

Eight Common Myths about the Real Estate Market

1. Myth:  The high “average house price” for a specific region, like Vancouver, means the market is unattainable for the average buyer.

“In fact, the average house prices that you often read about in real estate studies are often skewed by housing sales in elite neighbourhoods in Vancouver,” says Daniel Boisvert, a Notary Public in Tsawwassen. “This can create the false impression that all houses are similarly priced and unaffordable to young families and first-time buyers, which just isn’t true if buyers are willing to look at other neighbourhoods, different types of homes and nearby municipalities.”

2. Myth:  Most investment rental properties in Vancouver are owned by off-shore buyers.

“I have seen an increase in local residents purchasing condos downtown as an investment,” says Akash Sablok, President, The Society of Notaries Public of BC, and a Notary Public in East Vancouver. “Due to lower interest rates and a strong rental market, investment properties are seen as a good investment, creating a positive cash flow and adding to affordable rental housing.”

3. Myth:  A small hike in interest rates would make mortgage payments challenging and home buying inaccessible.

“Interest rates are so low right now that a small increase in mortgage rates wouldn’t increase one’s payments a significant amount,” says Derek Smoluk, Kamloops Notary Public.

4. Myth:  A large down payment is required when buying a home.

"We are seeing a great number of high-ratio financing purchases right now, where the purchaser is only required to have a minimal down payment. We are also seeing multiple family members, such as parents and their children, going on the title and the mortgage together to make the purchase more affordable, and in some cases to make the purchase possible,” says Kristy Martin, Victoria (Langford) Notary Public.

5. Myth:  Condos and houses are similar investments.

“I have seen a widening gap develop between condo values and house prices. With single-family detached houses, there is never an oversupply, but with condos, particularly in downtown Vancouver, there is a constant increase in supply,” says David Watts, a Notary Public in Downtown Vancouver. “On the upside, condos are in very high demand as rental properties. It’s important for clients to fully consider their current and future goals when purchasing either type of home. Both are good investments, but for slightly different reasons.”

6. Myth:  Only lawyers can complete all the legal documents.

“In fact, BC Notaries can give legal advice with regard to your real estate transactions. Notaries are trained and authorized to draw up and complete all the legal documentation involved with the purchase or sale of a home,” says Nick Aubin, a Notary Public in Kelowna and Lake Country. “Additionally, Notaries are involved in more than half of all real estate transactions in BC.”

7. Myth:  If the seller has deferred paying property taxes, it won’t affect selling their home.

“While the purchaser would not be on the hook for these outstanding taxes, the property title cannot transfer to new owners until it’s paid,” says Laurie Salvador, a Notary Public in Sidney. “This is the responsibility of the seller and is taken care of by the seller’s Notary as part of the closing process.”

8. Myth:  You can always get the best deal on a mortgage if you do it yourself.

 

“Often a mortgage broker can negotiate a better interest rate and terms for your mortgage needs than you would be able to secure on your own,” says Filip de Sagher, a Vancouver Notary Public.

About BC Notaries

 

The Society of Notaries Public of BC represents more than 320 highly trained Notary professionals. Most have locally owned and operated offices and all provide personal assistance to clients around the province. Individuals, families, and businesses seek the services of BC Notaries for a wide range of non-contentious legal matters including Residential and Commercial Real Estate Transfers, Mortgage Refinancing, Wills and Advance Health Care Planning, Powers of Attorney, and other important documents.

 

The Notary’s Tradition of Trust spans 2000 years. Notaries first came to British Columbia over 100 years ago. They continue to serve their valued clients and their communities across the province.  For more information, please visit www.notaries.bc.ca.

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Editors: Local Notaries are available in many areas of BC to talk about regional real estate trends and how Notaries can assist with real estate transactions.

 

Media contacts:

 

 

Karen Cook                                                                  Brenda Jones
604 551-9074                                                              604-312-1070

karen@cookpublicrelations.com                                  brenda_jones@shaw.ca

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