Conditional Sale Disclosure Form For Calgary Home Sellers

Calgary home sellers that have accepted a conditional offer have to instruct their agent how the property status is to be disclosed while it is under contract.

CREB® has a mandatory form all sellers need to sign that outlines all the different levels of disclosure available.

Generally speaking, I advise sellers against the  “Pending” status unless they absolutely do not want any more showings.  This in turn means a greatly reduced chance of a backup offer.

Under Contract status is great because it still shows as active on MLS® and agents know it’s C/S but the seller is still allowing showings. Same with Active options #1-3.

However, if a seller selects Active #4, I say there will be a pox on them and their household.  Just kidding. But that option wastes everyone’s time.  A buyer wants confidence that when they write an offer, the home isn’t already taken.  Remember, the buyer is going to find out shortly anyways when the counter-offer returns with a seller’s condition stating that it’s dependent on their first offer falling through.   Now you have an upset buyer with an annoyed buyer’s agent.  Not the greatest way to start negotiations, is it?

Note:  In theory, the Active #4 option should alert buyer agents that a home is C/S  when the listing agent responds with “the seller has instructed me not to answer that question.”  In practice, as a buyer agent I usually get showing confirmation without any mention of the home’s status.

Seller Disclosure Options

checkbox Pending

  •  Brokerage will disclose the existence of a conditional offer
  • There will be a pending sale acknowledgement on signage
  • Property will not display on REALTOR®.ca and will display as P(Pending) on the CREB® MLS® System
  • Brokerage will not actively market the property for sale and showings will not be permitted

checkbox Under Contract

  •  Brokerage will disclose the existence of a conditional offer
  • Property will display as Active on REALTOR®.ca and will display as U (Under contract) on the CREB® MLS® System
  • Brokerage will continue to actively market the property for sale and showings will be permitted

checkbox Active:

  • Property will display as Active on REALTOR®.ca and on the CREB® MLS® System
  • Brokerage will actively market the property for sale and showings will be permitted
  • When selecting A (Active) Please choose from the following disclosure options:
    checkbox 1. Instruct the brokerage to disclose the existence of a conditional offer if specifically asked
    checkbox 2. Instruct the brokerage to disclose the existence of a conditional offer when a showing is requested
    checkbox 3. Instruct the brokerage to disclose the existence of a conditional offer in the Private remarks on the CREB® MLS® System
    checkbox 4. Instruct the brokerage to not disclose the existence of a conditional offer. I acknowledge the legal obligation of the brokerage to be truthful, therefore, the Brokerage will respond to status inquiries with “The Seller has instructed me not to answer that question”

To download the form to review, please click here pdf

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RBC 2015 Housing Market Forecast

Forecast2015Canada’s housing market will moderate in 2015 but wide regional differences will remain across the country according to a new forecast out by RBC Economics.   This forecast was moderately revised upwards from their previous projections in May due to stronger than anticipated activity.

Housing demand in Canada continues to be supported by factors such as:

  • demographics (fairly steady immigration)
  • generally upbeat macroeconomic environment
  • still-low interest rates despite their project rise

Downside Risks

A faltering economy would cause a surge in unemployment resulting in a “much harsher outcome” since RBC believes the market is in a “fairly vulnerable position to withstand an unanticipated shock” because of:

  • near-record household indebtedness
  • stretched property valuation
  • interest rates have little room to drop to offset any shock

Alberta #1

Alberta remains at the top of RBC’s rankings for 2015 “thanks to its strong economy and in-migration keeping the demand-supply equation still somewhat tight.”   House prices in the province are expected to rise 3.9% in 2015 following a 6.4% increase this year.   Alberta is one of only two regions RBC expects to post a rise in sales in 2015 (0.7%), the other being the Atlantic provinces.

You can download and read the entire forecast herepdf

 

Don’t Rely Solely On RPR When It Comes To Fences

RPR Warning

Real Property Reports (RPR) and Fences

My neighbour refuses to believe that the fence between our two properties was on the boundary. He says that his real property report shows the fence as being inside his property line by 0.27 metres and, therefore, he had the right to tear down the fence.
-Signed Derek

First, a real property report usually contains the following statement, “The attached plan should not be used to establish boundaries because of the risk of misinterpretation or measurement error by the user.”

No one should be using their real property report to determine where to put up (or tear down) a fence.  The real property report was not meant for that purpose. Instead, get an Alberta Land Surveyor to physically mark on the ground where the property line so you can build the fence on or inside the property line and save a big headache.

In this case, the neighbour misread the real property report. The fence between the neighbour and Derek’s property was on the property line. It was the fence between Derek’s property and the back alley that was inside the property line by 0.27 metres.

Source: Boundaries newsletter and the Alberta Land Surveyors’ Association.

August 1-14, 2014 Calgary Real Estate Market Update

For some time now, when economists were referencing overheated Canadian real estate markets they pinpointed two cities in particular:  Vancouver & Toronto. Recent bank commentaries have begun including Calgary as prices here have been rising at double-digit percentages.

Last month RBC cautioned that “affordability will be strained by home prices outpacing income gains in key markets such as Toronto, Vancouver and Calgary.”

In a research note today, BMO had this to say: “The only gripe is that prices in the three hot regions—Calgary, Toronto and Vancouver—are rising faster than family income, further straining affordability. While there will always be condos to satisfy the demand for reasonably affordable housing in these cities, the widening gap in prices versus detached homes means that a lot of young, growing families will be forced to live the condo lifestyle for much longer than they intend. In addition, continued rapid price gains in these cities will increase their vulnerability to a shock.”

Fortunately for buyers and the overall health of the market, Calgary region new housing construction is booming which will alleviate the supply crunch.  With prices having recovered to near or above 2007 prices, we’re experiencing high levels of new listings, further easing pressure on the market.

The other side of the supply equation is demand and through two weeks this month, buyers have been out in force.   Between August 1-14, there have been 1001 total sales which is on pace for the best August on record.

After an extremely weak opening, the luxury market exploded with activity in week 2 bringing the month-to-date total to 33 sales.   Early signs are that the mortgage rule change CMHC put in place effective July 31, 2014  (no longer offering mortgage insurance for homes that cost $1 million or
more, regardless of the down payment amount) has had little impact in curbing the high-end market.

Sales-to-new-listings-august-14-2014

Calgary home Sales - August 14 2014

Calgary home Sales – August 14 2014

Calgary Luxury Sales - August 14 2014

Calgary Luxury Sales – August 14 2014

August 1-14 stats summary

August 1-14 stats summary

Canadian Housing Market Report: July 2014

Download the full CREA statistics report for July: here

July Report Highlights

• NaPrices Up In Julytional home sales rose 0.8% from June to July.
• Actual (not seasonally adjusted) activity was 7.2% higher than July 2013 levels.
• The number of newly listed homes edged up 0.4% from June to July.
• The Canadian housing market remains in balanced territory.
• The MLS® Home Price Index (HPI) rose 5.3% year-over-year in July.
• The national average sale price rose 5.0% on a year-over-year basis in July

Bank Commentary

TDTD Economics: The renewed momentum in Canada’s housing market in recent months represents both a bounce back from weather-related weakness over the winter months and a response to lower mortgage rates. Potential buyers who may have sat on the sidelines last year as interest rates rose, are being enticed back to the market by lower interest rates. Meanwhile, a strengthening in economic growth continues to support the fundamental demand in the housing market.

However, existing home prices (average and on a quality-adjusted basis) are on track to outstrip income growth for a second straight year in 2014, which adds to concerns about an already-overpriced market. Affordability, even at low interest rates, has become an obstacle in many markets. This contributes to our view that the Canadian housing market will cool later this year and into 2015 as interest rates are likely to nudge higher. Another factor which is expected to weigh on prices is the supply growth in the pipeline due to the record number of new homes that are under construction in many markets.  (Read full commentary here pdf)

bmoBMO Economics: Canada’s housing market remains healthy and well balanced overall, albeit with sizeable (though perhaps lessening) disparities across regions. The only gripe is that prices in the three hot regions—Calgary, Toronto and Vancouver—are rising faster than family income, further straining affordability. While there will
always be condos to satisfy the demand for reasonably affordable housing in these cities, the widening gap in prices versus detached homes means that a lot of young, growing families will be forced to live the condo lifestyle for much longer than they intend. In addition, continued rapid price gains in these cities will increase their vulnerability to a shock.  (Read full commentary here pdf)

RBC Economics: RBC This latest crop of statistics on Canada’s housing market indicates that upward momentum is being sustained at this point, and that any slowing in activity will have to wait a little longer. We continue to expect,nonetheless, that the market will transition to lower resale levels—closer to the long-term average—and that the rate of price increases will moderate over the coming year. We believe the current momentum reflects recent declines in fixed mortgage rates to a large degree, which we expect will gradually reverse in the period ahead as the economy strengthens. In our view, pressures emanating from rising prices and gradually increasing interest rates will erode housing affordability, and in turn will weigh on homebuyer demand.  (Read full commentary here pdf)

Calgary New Housing Price Gain Eases In June

Calgary new housing annual price growth remained the highest in Canada, but posted the smallest monthly gain since last year according to the Statistics Canada report.

New home prices in Calgary rose by 0.3% in June, as builders continued to report higher material and labour costs, good market conditions and higher costs for developed land as the reasons for the gain.  However, this was the smallest monthly price increase in Calgary since December 2013 as seen below:

Calgary Month-Over-Month Increases 

  • May 2014: 0.8%
  • April 2014: 0.6%
  • March 2014: 0.8%
  • February 2014:  0.9%
  • January 2014: 1.3%

Last month we took a look at how the new housing market in Calgary differs from Edmonton.  Below is some additional insight from ATB Economist Todd Hirsch:

“Both cities continue to do well economically and attract growing populations from interprovincial migration. The difference can be attributed to higher building costs in Calgary.”

“Over the last three years, the price of a new house in Calgary has risen by 14 per cent. The cost of the land itself has risen by 7.3 per cent. But the cost of building the house—which includes material and labour—has risen by a much steeper 19.3 per cent. Over the last three years, the price of a new house in Calgary has risen by 14 per cent. The cost of the land itself has risen by 7.3 per cent. But the cost of building the house—which includes material and labour—has risen by a much steeper 19.3 per cent.”  (Source)

(click to enlarge)

(click to enlarge)

Did You Know…

If you’re looking to buy a new home from a participating builder, there can only be one price for the home whether sold in-house or by a REALTOR®?

That means I can act as your Buyer Agent and provide representation and advice without costing you additional money or losing any leverage when negotiating. Why wouldn’t you want to take advantage of that?

To find out more about the program and which builders participate, click here

Calgary House Price Growth To Slow In 2015 To 2.8%

Calgary home prices will continue to rise next year but at a slower rate according to CMHC’s recent Housing Market Outlook report released a couple days ago.

CMHC is predicting the average MLS® sales price for Calgary to increase 5% this year but then only 2.8% in 2015.  Likewise, sales are expected to go from posting a 9.8% gain this year and then pullback to a 2.4% annual gain next year.

Frankly, price growth returning to just above inflation is welcome in my books.

Teranet-National Bank National House Price Index for July was also released  this week.  In Calgary, repeat sale prices in July prices climbed 8.2% – the highest annual gain in the cities tracked by the index.

TD Commentary

“The headline national number tends to commonly hide the underlying dynamics of the housing market. Following a long period of overbuilding, cities like Halifax, Ottawa and Québec City now have high levels of unabsorbed inventories and new listings. As a result they have been on a declining price trend since the beginning of the year. Conversely, the lack of homes for sale in other major cities, especially in the single-family home market, appears to be a key factor in mounting price pressures. Calgary, which has led the way in price growth so far this year (8.8% year-to-date avg.), has an undersupplied market in both the single-family and condo categories.

“Over the medium term, we are still of the view that the housing market is bound to see a soft landing on the back of gradually rising interest rates and a moderate employment picture. In addition, there are a record number of new homes under construction, which once completed will increase supply
and help alleviate some of the price pressures. Even Calgary should see home prices cool to about 3% by the end of 2015.” (Source)

Calgary Y/Y hike largest in Canada

Calgary Y/Y hike largest in Canada