Letting a property be the property it is can be a challenging proposition in today’s world. Shouldn’t my home present just as they do on the TV shows? Immaculately staged, shiny & new? Well what we see in homes day-to-day is far different than whats on the television. Often times, people feel discouraged by the disparity from reality TV and REAL life and try to wow with one major room renovation in the home. I think better advice, at least far more realistic advice, is to make sure that what currently exists functions well & shows the best that it can.
Basic maintenance can go a long way to making a property saleable. So often we find homeowners have band-aided over glaring issues, only to spend (waste) time on new interior styles & colours. Why bother repairing the roof and furnace, lets just paint the room, put up some new lighting and call it a day!
Now many of us know what it’s like to get behind the 8 ball, and yes, sometimes home repairs (which turn into deferred maintenance) do run away and mount a massive challenge. But, just as you would save for a college fund for your kids, saving for the health of your home is equally important! It’s usually the largest investment you’ll make in your lifetime, so best keep it up for the long run! You don’t buy a car and then never again change the oil.
Diligently setting aside money on a monthly basis can help ease the burden when maintenance items come along. I would suggest $200 a month for an average 2,000 sq.ft. home. This should keep you up to speed throughout the year & any larger items (dependant on timing) should be covered off by the remaining funds.
I would much rather walk into a 1975 bi-level home and see that the roof is less than 10 years old & well maintained, the furnace is recently serviced and functioning well, the hot water tank is recently replaced, carpets cleaned, windows updated & fireplace functioning; to name a few items. Over walking into a home where the windows need replacement, furnace is on it’s last leg, siding is weathered, hot water tank is nearly leaking, but “we’ve renovated the kitchen and bathroom isn’t it beautiful!” We’ll no, not really. Those rooms may now look like the homes on TV but the rest of your home is in for some serious repairs!
So much about about the real estate game comes down to simple priorities and if you can’t cover the basics, don’t stretch for the frills. If you don’t know the basics, find out what they are and make sure you’re buying a home that fits your budget.
To know where you stand, having a realtor; better yet a home inspector, come and view your home and provide you with a rough idea of what will need to be dealt with next is a great place to start. Realtors will often visit you for free (in hopes of your future business… pretty fair?) and home inspectors will usually charge about $450 but will be able to provide you with a comprehensive list of items in need of attention. This is the best way to go. A realtor can give you generalities but the home inspector is much more to the point.
This being said, I am finding new buyers are much better informed as to the cost of home ownership, the internet has been a boon for those entering the real estate market with reams of personal stories and advice on one of world’s most rewarding purchases.
Although the cold weather is already upon us, here are some tips on winter home maintenance: For about $80-$100 a technician can inspect your furnace or heat pump to make sure it’s in good repair and can achieve it’s efficiency rating. Any ceiling fans in your home can be switched to run in a clockwise direction and push down into the room any heated air trapped near the ceiling. Take a look at your roof shingles and if there are any loose or damaged ones, use some roofing cement to re-adhere them to the surface. If there are cracks showing around windows and doors, simply reapplying silicone caulking can save you a bundle in heat loss throughout the winter months. have your gutters cleaned now to prepare for the spring time thaw. Inspect downspouts and make sure that water runs at least 3-4 feet away from foundations. Drain exterior faucet pipes and turn the shut off valve in your home to make sure they won’t freeze, burst and cause flooding.
Be sure to start stocking your cold-weather essentials like salt or ice-melt and when it comes to home improvements, remember to cover the basics first! You can find an excellent maintenance list from CMHC here in my blog http://joepeters.ca/blog/

That cabin on the lake you’ve always wanted? Buy it!  

Well let’s face it, we’ve all dreamt of having a cabin or condo where the family can gather and unwind from our busy over-stimulated lives, and now for the first time in a long time you may just have a prudent excuse to make it happen! 
Reports are coming out across Canada that recreational property sales are set for a period of sustained growth as Canada pulls its way towards a stable economy. What’s causing this trend? Many Canadians are sitting on healthy equity gains from Canada’s run in property prices, and the stock market’s frothy trajectory over the past few years. In addition to this, the baby boomer generation is looking to buy a secondary, less maintenance heavy property that will allow them to transition to their retirement travel plans. Many will split time between multiple destinations and a condo in the Okanagan is a great way to achieve that! nudge nudge… 
Other factors driving this trend are that many areas in BC in the recreational property category have sold off since the peak in 2008. They are now as close to bargains as they will get during this cycle. Along with this motivation, is the overall pent-up demand from years of buyers sitting on their hands.
Pitfalls to watch for with recreational properties are: How is that septic system functioning? and that well the owner says is artisan and provides  60gpm… yes, it may have 25 years ago when it was first drilled but time = change. Have these things thoroughly tested! Sources of water throughout BC have been known to fluctuate in volume and quality and it’s good to know the true history of a property’s source. Are you going to be in trouble next time those drought conditions return? Take this process on slowly and speak to experts, yes you will pay more at the beginning for proper reports (sometimes a few thousand) but in the long run, there’s no joy owning property with no water! 
When buying a condo unit the important details to consider are: how is the contingency reserve fund? Have they been paying into it adequately to compensate for future expenditures? What does the maintenance picture look like; is there a pile of deferred maintenance items just waiting to explode on the strata or has it been properly managed over the years. Simply reading two years worth of minutes can give immense insight into the quality of management within a strata. If you see them constantly deferring items as they arise, it may be a sign of a dangerous long term trend. 
If the intention is to enjoy the property part time, being part of a rental pool, such as the Summerland Lakefront Resort is a great way to go; carefree and low maintenance. 
However, if the family requires more space such as a cabin, there are property management companies offering service for those circumstances too. 
Getting to and from the area has become even easier as Westjet now has direct flights from Edmonton and Calgary with Air Canada offering direct flights from Vancouver. 
This has allowed the Penticton area to become a great launching pad for all of your vacation fun! Head to the wine trails and enjoy some of the most spectacular wineries in the world. Spend a day boating on the lake, or playing at one of the many beaches. 
After 5 years of declining real estate activity we are seeing a significant balancing occurring in the marketplace. The South Okanagan offers up tons of opportunity for those willing to explore.

Qualifying Rate

Mortgages with variable rates or fixed terms under five years typically require that you qualify at a higher rate (called the “qualifying rate.”).

For example, if you apply for a 2.25%, 5-year variable mortgage, the lender might make you qualify at their posted 5-year rate (5.39% for example).

Qualifying rates are used to ensure borrowers can handle their payments if rates go up.

In practice, lenders use the qualifying rate to calculate your debt service ratios. Lenders then check to ensure your debt ratios are low enough to meet their guidelines.

Here are a few things to keep in mind:

Your payments are typically based on the contract rate (i.e., the regular rate you are quoted), not the qualifying rate.
As of April 19, 2010, all insured variable and 1- to 4-year fixed mortgages over 80% loan-to-value must be qualified using the posted 5-year fixed rate, as published every Wednesday by the Bank of Canada.
Some lenders also apply the Bank of Canada qualifying rate to uninsured mortgages, and mortgages with a loan-to-value of 80% or less.
Other lenders allow lower qualifying rates if the loan-to-value is 80% or less (e.g. they use a 3-year discounted fixed rate instead of the posted 5-year fixed rate).

Always count on having to qualify at a higher than posted rate. With rates so low, they are bound to rise eventually and you’ll want this worked into your budget!

As forecasted, the Spring market is showing signs of strength in the South Okanagan and some sales that would have been unthinkable over the past few years have sailed through to completion! We do appear to be experiencing a recovery!

In Penticton, sales volume is up 53% from a year ago to $51m and prices have edged up 1% to $304,497.
In Summerland, sales volume is up a whopping 132% to $14.6m year-to-date. With prices up 13% to $325,024.
These two markets have stabilized and it’s a great time to fix and flip, move up, downsize, whatever your heart desires!

Bucking the trend this spring, Naramata sales volume is off 52%, as are average sales prices to $437,833. now that being said, this has to be taken with a grain of salt because last year had a number of very large transactions skew the average sales figures. The market here is still extremely healthy. The luxury market of Naramata will always have volatile statistics… but it remains ever desirable!

Kaleden & Ok falls has seen sales volume spike 55% over last year to $10.25m. With prices down slightly at 3% to $379,505.

Oliver sales volume is up 78% to $7.7m. with prices up 10% to $226,395. Oliver is set for a resurgence as the construction of the Okanagan’s first penitentiary gets underway this spring. I would expect this massive job creator (300 full time & permanent jobs) to assist with a South Okanagan’s rebound strongly over the next 1-3 years.

Osoyoos has seen sales volume rise 113% to $11.2m with prices up 15% to $303,147.  

This is a STRONG market, and if you aren’t listed yet, call me today! Also, if you are buying there’s a good selection of homes out there, lets go have a look!

This will shed some light on the best prep work for you when thinking of purchasing. You know you’ll need the bank’s money, and here is how to get it!

Your bank or mortgage broker will need you to provide:

• Verification of Salary/Employment/Income usually at least 2 years worth T4’s or T1’s and Revenue Canada Notice of Assessments

• Letter of Employment (on company letterhead) stating start date, full or part time, wage or salary amount
• Current paystubs with year-to-date earnings

• Copy of any Asset Statements (RRSP, GIC, RSP, Property, Stocks, Bonds)
• Bank statement showing cash

 If financing on your own isn’t in the cards:

• Gift letter – signed by both parties – (when applicable)

copy of gift deposit in applicants account – 15 days prior to close

When the purchase is made, your mortgage broker will need:

• Copy of Contract of Purchase and Sale, with any addendums
• Property disclosure statement
• Title search
• Copy of MLS listing info sheet
• Current appraisal – if required

Closing Costs to consider:

Property Transfer Tax (unless exempt as a first time homebuyer, yay!)

Legal Expenses, conveyancing costs

Municipal Tax holdback

Appraisal

CMHC/GEIMCO mortgage insurance fee (if applicable)

Survey Certificate OR title insurance

Home inspection

Home insurance

Great Local Mortgage Brokers:

Shawn Olma, Mortgage Alliance, 102 – 483 Main St Penticton BC (250)490-8090 [email protected]

Campbell Watt, Dominion Lending Centres, 437 Main St Penticton BC (250)462-7687 [email protected]

The Form B has gone through a continual evolution throughout it’s life, disclosing important information about the current status of strata units in any given development.

The most recent update to the form is of supreme importance to understand the nature of control afforded to the Strata unit holder of parking stalls and storage lockers. It is now mandatory, as of January 1, 2014, for Strata Corporations to disclose how parking and storage lockers are allocated to strata lots on the new Form B. Now this may seem to be an obvious disclosure, but believe me, this simple disclosures’ history has proven anything but ‘obvious’.
Many legal battles have been fought over the perceived rights of use for these strata items. Let me take a moment to give an example:

“The recent decision of Blackall v. Jarrold et al.3 concerned a dispute over parking. In Blackall, the buyers of a strata unit sued the sellers for negligently misrepresenting the number of parking stalls included in the sale. The Property Disclosure Statement stated that “parking stalls 598 and 601 are included in the purchase price along with storage locker 291, all of which will be assigned by the buyer on completion date.” Both the buyers and the sellers believed that the parking stalls were designated as limited common property (LCP), and thus for the sellers’ exclusive use.
In fact, only one of the stalls was designated LCP. While the original purchasers of the strata lot had paid the developer $5,350 for the use of the second parking stall at the time of their purchase, neither they nor the developer took steps to amend the strata plan. Thus the second parking stall, as common property, remained under the control of the strata corporation.”

In this circumstance the court decided that the Buyer, and their representative had not fulfilled their due diligence by reviewing the available strata plans which in this case would have designated only the one parking stall as limited common property for their exclusive use.
Although the Seller was not forced to pay any damages in this case, surely, one can see the damage done to the Buyer by this negligence. If you and your partner each had a car you would now be forced to rent a stall from the strata corporation for that second vehicle. Although likely a minor expense in some areas (South Okanagan) it could be a major problem if you lived in Vancouver where parking stalls can run at a premium. If downtown, you could be looking at an extra $200 a month. Not an immaterial difference if you expect to live there for say 5 years, thats an extra $12,000 in expense, just for parking!
Here is an example Form B for referencing these much needed additions. The devil’s always in the details… Example Form B

Reflecting the new reality of buying real estate in British Columbia, where the average home is now over $500,000, the government has increased the exemption amount by $50,000 from $425,000 to $475,000 for first time homebuyers! This is a huge benefit, as so many homes will fall into this price category, and will save buyers roughly $7,000 in taxes at the time of purchase.

There is also a $50,000 increase in the partial exemption, which has been increased from $450,000 to $500,000 on properties larger than .5 hectares and that have a secondary building besides the principal residence.

To qualify for an exemption from the BC property transfer tax, at the time the property is registered you must:
• be a Canadian citizen or permanent resident
• have lived in B.C. for 12 consecutive months immediately before the date you register the property or filed at least 2 income tax returns as a B.C. resident in the last 6 years
• have never owned an interest in a principal residence anywhere in the world at any time 
• you have never received a first time home buyers’ exemption or refund
and the property must:
• be located in B.C.
• only be used as your principal residence
• have a fair market value of: 
◦ $475,000 or less if registered on or after February 19, 2014
• be 0.5 hectares (1.24 acres) or smaller
You may qualify for a partial exemption from the tax if the property:
• has a fair market value less than: 
◦ $500,000 if registered on or after February 19, 2014
• is larger than 0.5 hectares
• has another building on the property other than the principal residence

History of the BC property transfer tax

When the province first introduced the Property Transfer Tax (PTT) almost a quarter of a
century ago it was difficult to foresee the tremendous economic growth or the high cost
of housing that exist today in British Columbia.
First introduced in 1987 by the Social Credit government of William Vander Zalm, it was
conceived of as a tax on the wealthy. It was believed that the 1 percent tax on the first
$200,000 on the cost of a home was modest and that the 2 percent tax over that would
apply to only 1 in 20 buyers.
But times have changed and the exact opposite is now true. In 2009, the 2 percent levy
applied to more than 88 percent of the homes sold in British Columbia (even more today, 2014). The wealth tax has become an unfair tax that inflates the cost of housing, erodes affordability

and discourages labour mobility.
In the city of Vancouver, house prices have skyrocketed over the last 25 years. Whereas
the average price of home in 1987 was under $200,000 – that same property in 2011
costs a breathtaking $760,000.
What might have been considered as a reasonable down payment on a home in 1987 is
today equal to the value of the PTT. That average sale price for home in Vancouver will
in fact cost an additional $13,200 in PTT in 2011.
And every time the house changes hands, the PTT escalates and inflates the cost of the home, attacking affordability and sucking money out the rest of the economy.
Property transfer taxes are often described as the most hated and unfair taxes in
Canada and nowhere in country is the provincial land transfer tax more burdensome
than in British Columbia. In Ontario, the province takes $2,725 on a $300,000 home. In
B.C., the province demands $4,000.
BC ranks worst among all provinces in terms of burden of land transfer taxes on
homeowners. In fact, British Columbians pay 222% more in land transfer taxes per
transaction than the average Canadian and the BC Government levies a PTT rate that is
129% higher than the average for Canadian provinces. Higher property prices are not solely to blame for this scenario; prices in British Columbia are 45% higher than the Canadian average, so the inequitable structure of the BC Government’s PTT adds an additional burden of up to 177%.
Government revenues from the tax have soared from $140 million a year in 1987 to well
over $1 billion today.
This move to increase the exemption is well past due, and is a small measure against a massive structural problem for real estate transactions in BC, but it’s better than nothing!

Normally one can approach new regulations with a certain level of skepticism; so often we find them ineffective and just a costly impediment to conducting ones business. They are often created for the sake of a silly lawsuit that happened somewhere, sometime (Susie fell and broke her arm… Again, but let’s make this time your fault!).
However, I can say with confidence that depreciation reports are the best thing to happen in the regulation of Strata corporations in a very long time.

Strata corporations in British Columbia need to obtain depreciation reports every three years unless they hold an annual 3/4 (three quarter) vote to exempt or have four, or fewer, strata lots. There are different timing requirements for the first depreciation report depending on when the strata corporation was formed:

For strata corporations formed on or before December 14, 2011, a depreciation report is required by December 13, 2013.
For strata corporations formed after December 14, 2011, a depreciation report is required within 6 months after their second AGM.

Depreciation reports help strata corporations, including bare-land strata corporations, plan for the repair, maintenance and replacement of common property, limited common property and common assets over a 30 year period.
The report must contain:
▪ A physical inventory of the common property and assets.
▪ Anticipated maintenance, repair and replacement costs for common expenses projected over 30 years.
▪ A financial forecasting section with at least three cash flow funding models. Depreciation reports provide useful information to strata lot owners,
prospective purchasers, mortgage providers and insurance companies.
Depreciation reports are also known as reserve fund studies in other jurisdictions and have been a standard requirement in most Canadian provinces.

Although Strata corporations can elect to exempt themselves from conducting the report, I would see this soon becoming a recognized disadvantage. Who would prefer to know the ages of components in a given building, remaining economic life and estimated costs of maintenance or replacement – I would think, all hands go up!

The South Okanagan real estate market of 2013 went through a period of stabilizing and appears to be building a floor for home prices and levels of activity. There were 8% fewer listings throughout the year at 4,668 units and 6% more listings reported sold of those listed at 1,614. These factors of supply and demand are positive signs of a balancing market.

Taking a quick look at the single family home market, prices are down in what I would call moderate fashion considering the tumultuous few years of the global economy.

Single Family Homes:

Penticton: December 2008 – $421,319 December 2013 – $362,572 -14%

Summerland: December 2008 – $481,973 December 2013 – $395,090 -18%

Oliver: December 2008 – $358,935 December 2013 – $297,268 -17%

Kaleden: December 2008 – $592,493 December 2013 – $453,711 -23%

Naramata: December 2008 – $542,927 December 2013 – $626,776 +15%

We’ve seen multiple offer situations over the past few months that have been almost non existent (unless on foreclosed properties) for the past few years. This is a great sign that people are actively pursuing their goals and are no longer waiting on the sidelines.

The consensus view among industry professionals is that 2014 is shaping up to be a much stronger year than we have experienced for quite some time.

Although prices may not increase just quite yet, we do see them stabilizing.

This makes for a great time to make transitions within the south okanagan.

If you ever want to discuss ideas you’ve had or goals you want to act on, please get in touch with me anytime!