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Big Brother is Watching You!

June 27, 2008 by Leave a Comment

They have come up with a new regulation that I will have to be accountable for. I am checking with the BC Civil Liberties Association, but at present I have no choice but to give the company more of your personal information. The new regulation is part of bill C-25. Check out the information below.

Big Brother is Watching You!

“New federal laws and regulations dealing with money laundering and anti-terrorist financing now in effect require real estate agents and brokers to collect and verify more personal information from buyers and sellers.

Real estate agents now must also track the source of funds received during the course of a real estate transaction, such as the deposit.

The new regulations are part of Bill C-25 passed in 2007 that requires a number of industries, including real estate, to do more to help stop money laundering and terrorist financing. The regulations are enforced by the federal agency known as the Financial Transactions and Reports Analysis Centre of Canada, or FINTRAC.

“Real estate agents have had legal obligations under the federal government’s push to prevent criminal activity and terrorism since 2001, when Canada’s first comprehensive laws to combat money laundering and terrorist financing were introduced,” said Canadian Real Estate Association president Calvin Lindberg.

“In the first phase of compliance, real estate agents were required to report only suspicious transactions, or transactions involving more than $10,000 in cash,” he added. “Now, verified personal information must be kept of the buyer and seller for each and every real estate transaction in Canada. That personal information includes details such as occupation.”

Real estate agents are now required to ask for proof of the identity of all buyers or sellers involved in a Canadian real estate transaction — there were 559,325 MLS® transactions last year. If the client is a corporation, that information must include corporate documentation and the names of the corporation directors. Agents must also ascertain if a third party is involved in the transaction.

This also applies if a buyer or seller involved in a transaction is not represented by a real estate agent, but the other individual involved is represented. Those buying or selling privately will be asked by the agent representing the other party involved in the transaction to provide proof of identity as well, and that record must be kept by the real estate agent involved in the transaction.

Also under the new FINTRAC regulations, real estate agents dealing with clients they never meet must also verify personal information. The broker office involved can do this with a service agreement with an agent or “mandatary” (one given the mandate to act in the transaction) in the area where the client is located. That agent or mandatary must then meet the client,

verify the identification of the client, and

provide the information to the broker office

actually handling the real estate transaction.

“There are buyers, sellers or investors from other countries who rely on expertise here rather than visiting the property themselves,” the CREA president said. “They must now meet with an official agent of the Canadian broker, and provide proof of identity. This agreement will add to the business costs of the Canadian broker.”

In addition to verification of personal information, real estate agents must also complete a report on the receipt of all funds received during the real estate transaction, not just those of $10,000 or more.

In order to comply with these new federal regulations, real estate agents are required to keep this identification and receipt of funds information on file for five years and provide it to FINTRAC if requested. It is the individual broker office that will be responsible for the safe keeping of the information, and the brokerage that will have to respond to any FINTRAC information request.

Filed Under: Buyers, Community, Listings, Mortgage, Real Estate, Regulations, Sellers, Vancouver Real Estate Tagged With: ,

Should I Panic Yet?

March 19, 2008 by Leave a Comment

Ok, we are in big doodoo. The dollar ain’t a dollar any more and the housing market in BC is on hold and even though we did not have the sub-prime mortgages the situation in the states is effecting our level of panic.

So what should you do?

First of all, stop freaking out. The answer is the same as it ever was. Buy when it is right for you. You cannot put it off until prices are better because when prices are better other things change. Interest rates may be higher, the state of the dollar is less stable, who knows what will change.

The most important thing is that you do not get yourself into a situation that if the interest rates go up you cannot pay your mortgage. The best way to fight this is to put a minimum of 20-25% down – more if you can. You will be able to get the lowest mortgages with this kind of down payment and will not have to pay a premium on the mortgage.

The second thing is to not buy a property that stretches your finances over your comfort zone. Say the mortgage person says you can get a mortgage for $400,000 but with taxes and maintenance you will have to fork out close to $3,500 per/month. If this will be hard for you and will involve your partner working when you wanted to have a baby, consider a less expensive alternative. Then if mortgage rates go up you will still have a bit of leeway before you would have to move the baby into the hall closet and rent the extra room to a home stay student to make ends meet.

The last consideration is time. Buy because you want to live in a place that is your own. Where you collect the benefits of the rent and no one will kick you out if you paint your bedroom black or listen to Abba at 3 am. Do not buy to make a fast buck by putting in laminate flooring, painting the walls red and selling for $50,000 more in three months.

Buy because the place you are living is no longer suited to your needs and it is time to find a better place for your new situation whether it is because you are having a baby or your kids have all moved out and you are tired of keeping up a 5 bedroom house for just the two of you.  If you are buying for investment, plan on doing the work yourself or keeping the property long enough so that inflation gives you your profit. And buy a place that you can rent out and still cover your bills if when you are ready to sell the market is low.

And, don’t panic. Our entire economic system is not going to crash and your little piece of heaven is still out there.
Mom

Quote from my mom: “I’ve been waiting 75 years for the fall of Capitalism.”

Filed Under: Buyers, East Vancouver Tagged With: , , , , , , , , ,

First Meeting to Co-Buy

January 21, 2008 by Leave a Comment

Congratulations

Congratulations! When you buy together it is time for Champagne!

I have been talking about buying together with other people for a long time. Things have not worked too well as various people have tried to get this happening. People wanted to live in different places, had different amounts to put down etc. I now have a client who is quite serious about finding a place that satisfies her needs, but to make it happen she will have to move out of town or buy with other people – thanks to the expenses of the city.

We have decided that the best way to move ahead would be to meet with people who have shown interest in co-buying in the past and see what their needs might be. If it would work for several people to buy together and the needs of several people could dovetail then we could go ahead and find a multiple unit building.

Needless to say, this form of buying does have other problems, but the benefits might override the handicaps. After all, buying together might be no more problematic than dealing with a strata council. In any case, all will be discussed at our meeting.

Our first meeting will be on Wednesday, January 23rd at my house, 741 East 28th Ave. and you are invited to come and see if this option can work for you. Feel free to bring anyone else you might find whom you think will be interested. I am also sending this out to others who might know someone who might like to buy with others. You might not like the original plan, but may find someone whom you could enjoy sharing a property with for the future. Take a chance. Join us at 7:30. You have nothing to lose.

Jeannie

  • January 23, 7:30
  • 741 East 28th Ave
  • Vancouver, V5V 2N6
  • 604-760-7342
Filed Under: Buyers, Buying With Others (Co-buying), Community, FORMS OF OWNERSHIP: Tagged With: , , , , , ,

Buyer’s Contract

December 3, 2007 by Leave a Comment

I use a Buyer’s Contract when I work with a buyer. I do this so that there is an agreement that we are working together. A Buyer’s Contract assures that I will work hard.

Babs

Here I am taking Babs on a tour of condos. Eventually we found her the best place in town for her. It brings me great joy to have my buyers find their dream homes.

Filed Under: Buyers, FORMS OF OWNERSHIP:, Real Estate, Vancouver, Vancouver Real Estate

Buying with Others

November 2, 2007 by 2 Comments

Joint Ownership

in the context of residential property joint ownership is where more than one person owns a property together. There are forms of joint ownership that have specific legal grounding. There are two main types, joint tenants and tenants in common.

* Joint tenants: neither party can sell without the other’s agreement. If one party dies, the other automatically inherits the other’s share. This is ideally suited to married couples or partners buying together who are in a long-term relationship.
* Tenants-in-common: each party can dispose of his or her share, either whilst alive or through a will. This is more appropriate for friends buying a property together, where they do not intend to live together as a couple.

(I recommend that you hold the property as ‘tenants in common’ so that if one of the owners were to die, their share in the property passes to their estate.)
Kitchen
If the joint ownership of the property involves a mortgage, then the mortgage will be on the basis of ‘joint and several liability’. This means that each buyer is liable to repay the whole of the mortgage if the others are unable or unwilling to do so.

A lender will make the offer of mortgage on the basis of the joint incomes of all applicants but ultimately it is up to the borrowers as a group to determine how they divide the monthly repayments on their joint mortgage. For example, if one applicant earns more than another, they might have a bigger share of the mortgage (and potentially, the property itself).

In fact, as long as all applicants are comfortable with the repayments, even if they have varying incomes they can agree to split repayments equally giving each of them a straightforward equal share in the mortgage.

Of course, the situation can be complicated where applicants have different deposit amounts. Even with different deposit amounts, it is possible to have equal ownership overall once the mortgage is taken into account. This is because the mortgage can be divided according to how the borrowers choose, and they can choose to divide the monthly mortgage payment so as to ‘even out’ the differences in deposit.

Because buying with others is a complicated process a proper legal agreement between the buyers is of great importance. It sets out the responsibilities one owes to the others and is there for the protection of all the owners.

Key points of a legal agreement for buying together.

1. The share each owner has in the property.
2. The percentage of the mortgage for which each owner is responsible.
3. In the event of one or more owners wishing to sell it specifies that they must first offer their share to the remaining owners, at the current market valuation:
* If the other owner/s wish to buy, they apply to the lender to take over the share of the departing person and if they are successful, the person selling their share is removed from the mortgage.
* If the remaining owners do not wish to purchase, either singly or together, or the lender will not increase the lending to enable them to do so, then the share may be offered on the open market.
* If no purchaser for the share can be found within a period of four months then the seller can require that the whole property is sold, each owner receiving their share of the remaining equity.
4. In the event that an owner wishes to vacate the property but retain their stake in it, he or she may rent out their part.
5. All owners agree to put in place and maintain life and critical illness insurance to the value of their share of the mortgage. Where an owner is unable to obtain cover due to medical reasons, he/she must advise the other co-owners. They may proceed at their discretion.
6. All owners undertake to put in place and maintain Accident, Sickness and Unemployment protection cover, sufficient to cover their share of the mortgage payments..
7. In the event of the death of one of the owners, his/her estate will be required to meet the cost of the deceased’s share of the monthly mortgage payment until redeemed (policy will be payable to the estate/beneficiaries). Their estate must offer their interest in the property, firstly to the other owners at the current market rate and, if they are not willing/able to purchase, then the estate may seek another purchaser – or indeed rent until a purchaser can be found.
8. In the event of a successful claim for critical illness being paid, the policy holder agrees to use the funds received to repay their share of the mortgage.
9. If one of the owners deliberately goes into default by absenting themselves without making arrangements to maintain their share of the mortgage – subject to a time-limit of two months, then the remaining owners can rent the absent party’s space (paying his/her share of the mortgage and retaining any profit for the aggravation) or purchase or sell his/her share of the property at the current market rate. Any residual monies, after deduction of reasonable expenses, will be placed, where possible, in the bank account of the absconder.
10. If one of the owners is in breach of the Agreement by failing to make their share of either the mortgage repayments or insurance premiums, then the other owner/s either singly or together can require that person to remedy the situation and should they fail to comply within a period of two months from the onset of the default, force the sale of the share of the defaulting owner as if they had absented themselves.
11. The owners will open a joint bank account or designate an account for the purpose of the payment of mortgage repayments and any insurance premiums. Each owner is responsible for making a timely payment into the account to cover his/her share of the above payments. Please note that it is not compulsory to open a joint account and a designated account of one of the applicants may be used until one is open.

Filed Under: Buyers, Buying With Others (Co-buying), Community, Neighbourhood, Real Estate, Vancouver, Vancouver Real Estate Tagged With: , , , ,