What’s (really) going on in the Victoria economy?
It’s a pattern you can rely on. Every month the headline job numbers are released by StatsCan, and (nearly) every month the media is absolutely shocked that they aren’t what was expected. “Canada’s job market blows past forecasts“, “the economy lost 71,200 jobs … missing the median economist forecast for a gain of 10,000 jobs“, “Canada unexpectedly loses 1800 jobs, widely missing forecasts“.
If you look at the standard error on those measurements, it’s pretty obvious why no one can predict them correctly: most of the time it’s bigger than the change itself. That, plus the inexact nature of seasonal adjustment in a shifting world (e.x. more shopping moving to Black Friday from Boxing Day) means the monthly job numbers are basically almost entirely noise. If the media was invited to a board game night, they would print headlines like “Dice shocks by coming up 3 when most expected 5!”.
There are many ways to extract trends out of noisy data, but the ironic thing is that Statistics Canada realises full well that the jobs numbers they put out are noisy and just looking at the raw data may be misleading. To correct this they specifically include the Trend Cycle Estimates in the same table to allow people to more easily see the likely trend underlying the noise. However – and perhaps I’ve missed it – not once have I read an article that referenced the trend in employment. The talk is always of the monthly numbers, followed by some discussion about full time vs part time, followed by discussions of monthly moves in specific sectors (we’re just getting more noisy here) followed by a hot take or two.
So skip the monthly headlines, and pay attention to the trend. In Canada it seems the growth in employment has been slowing. Meanwhile in BC, employment has been dropping for a few months but we had a similar episode in 2017 so I wouldn’t call it a trend yet. This will be one to watch in the coming months as some of the forestry, protest, and Coronavirus impacts hit employment. I’ve heard from a few employers that they are putting hiring on hold until they see how it shakes out. Notice also the steeper slope of employment growth starting in 2015, right around when the market really started heating up in Victoria.
The economy of course is key for the real estate market. After all, you need a job to pay your mortgage, and you certainly won’t be committing to any large purchases if your employment is precarious (neither will the banks lend). During the full blown panic of the Great Financial Crisis, prices were dropping quickly in Victoria as people were laid off and buyers waited it out. At that time the government crashed interest rates to bring affordability and confidence back to the market quite quickly, but it took another 9 years to get unemployment back to pre-GFC levels. Looking more closely at Victoria, we can see that our unemployment rate is currently near historic lows. Vancouver is enjoying similarly low unemployment, and on top of that has the highest job vacancy rate in the country which indicates demand above and beyond what can be filled (partially due to job demand, and partially due to high cost of living making it more difficult to attract employees).
In Victoria, other than the public sector we have an active tech sector and of course large employment in construction and related fields. We know that construction is at record highs, and employers in the tech sector that I’ve spoken to are positive, looking to substantially hire in the coming months or years. However if we examine the breakdown in employment by sector, it’s not construction or tech that stands out with outsized gains in recent years, it’s public administration. What is usually seen as a very steady employer has actually seen significant swings both up and down in the last 15 years. What’s behind the sharp uptick in public administration positions in 2019? An army of spec tax auditors? Late last year I heard that the province was freezing all hiring after going on a spree, but I wasn’t aware of the magnitude of the increase that came before.
I should note that I’m uncertain as to the quality of this data. It’s certainly quite noisy, and the chart below is already a 12 month average of the 3 month smoothed seasonally adjusted figures that come from StatsCan.
Growth in employment means of course growth in population, which means growth in the number of people that will be wanting a place to live, whether that is owned or rented. And population growth has recently hit a 15 year high of 2% in the region. That explains why inventory has turned downwards again and rental vacancy failed to increase despite record rental construction.
The tight labour market has also contributed to rising wages in the province which helps to improve affordability over time.
Overall then, the picture looks strong in the local economy. Low unemployment, strong population growth, and rising wages are all pushing on the demand side of the housing market. Of course the situation can change quickly as we saw in 2008, but as of now we have conditions supportive of the market.
Are there then areas of concern? Well, the bull run in the economy is long in the tooth, but many have tried to call the top in recent years and have been incorrect. It’s tough to make the case for the value of expert opinion in economic forecasting, if there ever was one. There will certainly be another recession, but will it be this year, next, or in 5 years? Despite mounting concerning global signs, no one knows. Right now we have a strong pipeline of infrastructure and rental construction in the province which support employment, but those projects can also be put on hold quite quickly if economic conditions deteriorate. We saw that in 2008 where construction ground to a literal halt (zero starts) for several months while builders evaluated conditions. Our tech industry is made up of few large resilient players and more startups that are what I would call fair weather businesses dependent on VC money that flows freely only during a boom. Meanwhile the province crafts what it calls a “challenging” budget. While I don’t expect public sector layoffs this year, we likely have seen the end of the growth in that side for the time being.
What do you think is in store for the Victoria economy?
Also weekly numbers, courtesy of the VREB.
| February 2020 |
Feb
2019
|
||||
|---|---|---|---|---|---|
| Wk 1 | Wk 2 | Wk 3 | Wk 4 | ||
| Sales | 154 | 294 | 421 | ||
| New Listings | 293 | 541 | 757 | ||
| Active Listings | 1970 | 2020 | 2131 | ||
| Sales to New Listings | 53% | 54% | 56% | ||
| Sales Projection | — | ||||
| Months of Inventory | 5.1 | ||||
The pace of sales last week was essentially unchanged from the week before, currently ahead by 24% from this time last year on 2% fewer listings. The good news for supply is that new listings are coming in about 25% faster than last February (last year we had snowmageddon in Februrary). That should limit the drawdown of inventory from the increased sales.
New post: https://househuntvictoria.ca/2020/02/24/nimbyism-is-incompatible-with-victorias-environmentalism-and-other-progressive-ideas/
“Tiny Homes” is just the new moniker for ‘trailer park’
The math in that article is nonsensical.
Got this text earlier tonight on a property I thought was at market value….
“6 OFFERS IN HAND. Please let me know if you havn’t already if you plan on writing or if you would like to make changes to your offer. Thanks”
Retirement plan at age of 73 or death whichever comes first.
Coming out way way behind. Listings are far less time then buyers; therefore, listings selling quicker doesn’t reduce your overall workload nearly as much as buyers being able to buy quicker. Secondly, even in the hottest markets a minority of your listings will sell in a bidding war whereas the majority of your buyers will be writing on multiple offer properties.
Here is one in Victoria. — https://www.cheknews.ca/couple-tiny-home-nowhere-go-kicked-rv-park-330920/
“trailer, is not a legal residence… garden suites are an allowable form of housing, but they must meet building codes, which means they are required to have utility hookups.”
$700,000 mortgage at age 48 with an income of $107,000. Retirement readiness: 3/5
https://business.financialpost.com/personal-finance/family-finance/trapped-in-a-house-they-can-barely-afford-this-ontario-couple-needs-to-find-ways-to-build-up-savings
In this case it’s a municipal thing but tiny homes is another one of those things that sound a lot better on paper than they are in real life. I expect if they had lived in it for 2 years they’d be about ready to sell now as well.
Were you, though?
Despite wasting more time on the buying end, writing lots of offers that don’t get accepted, aren’t you selling more and faster on the listing end and therefore coming out ahead overall?
After 2 years, couple sells tiny home without ever living in it
No, not BC but a good story.
I’m guessing the structural engineer who put that thing together is finding himself somewhat short of work these days…
Rumour (unsubstantiated) is the Danbrook One building may have to get demolished.
A judge rules that twenty floors need to be removed from the top of an unfinished NYC development.
https://www.cbc.ca/radio/asithappens/nyc-woman-ecstatic-as-judge-orders-20-floors-cut-from-already-built-condo-1.5471612
It would appear offer delays, multiples, and pre-inspections are making a bit of a comeback based on this weekend so far…….was hoping we left that behind in 2016/2017.
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I assume that’s in the low end or homes under 1.2MM?
It would appear offer delays, multiples, and pre-inspections are making a bit of a comeback based on this weekend so far…….was hoping we left that behind in 2016/2017.
Btw) previous post had numbers for Canada home ownership rates, but since we are talking about BC govt, here are the BC rates (same result, rising home ownership rate during the BC Govt)
Here’s stats can census data on BC homeownership rate
2001 66%
2016 67.5%
https://betterdwelling.com/homeownership-rates-across-canada-fall-for-the-first-time-in-over-45-years/#_
Good question, Well let’s have a look.
There was a bigger housing problem in 2001 than 2017, as measured by improving home ownership rate and improved rental vacancy rate over that period.
— Back then (2001), only 65.8% of people could afford a home (Canada home ownership rate) and in 2017 it had risen to 67.8% (See link)
—- Back then (2001), Victoria rental vacancy rate was 0.5%, in 2017 it was better at 0.7%, though it ranged from 0.5% to 3.0% during that period. For example, it was a healthy 3% in 2013, and we are worse at 1.0% now.
Home ownership rate: https://www.huffingtonpost.ca/2018/09/08/canadas-tradition-of-homeownership-is-at-risk_a_23520973/
Victoria vacancy rate: https://househuntvictoria.ca/2019/12/05/evaluating-the-cmhc-2020-victoria-outlook/
That government was in office from 2001 to 2017. When was there more of a housing problem, in 2001 or 2017?
The Vancouver Amazon office is literally a cheap outsourcing center for the us hq. Most of the programmers are not English speaking and a good portion of them serve the purpose of meeting the mandatory low performance firing quota.
Q. Why do you think the BC Construction industry would be lobbying and donating money to the govt?
A. To help convince the govt to make it easier for them to build more housing, to create BC jobs and solve the BC housing problem. Which is a good thing.
“That number ($1.5m out of $12.5m) isn’t big enough by itself to connect the dots to change govt policy, as opposed to the other 85%, and that’s assuming the donations impact policy at all.“
One thing that does impact policy is lobbying, and and developers are a very powerful lobby in this province. What do you think the UDI is all about?
Policy on political donations or on housing? Either way they certainly needed changing. And it’s a about a lot more than $1.5m:
https://nationalpost.com/news/canada/b-c-has-a-best-government-money-can-buy-political-donations-system
According to the details posted by timescolonist.com (see link) those eight of top 10 donors represented $1.5m donation out of $12.5m total, or 12% of donations from those eight. That number ($1.5m out of $12.5m) isn’t big enough by itself to connect the dots to change govt policy, as opposed to the other 85%, and that’s assuming the donations impact policy at all.
https://www.timescolonist.com/news/b-c/most-top-10-b-c-liberal-donors-in-construction-industry-1.7740415
“ Combined, the eight donors contributed nearly $1.5 million of the $12.5 million collected by the B.C. Liberals during the period, an analysis by Postmedia News of the donor list released by the Liberals last week shows.
—===|-
Moreover, what’s so evil about donations from the BC Construction industry? People around here love to “demonize” groups without explanation. Aren’t we all applauding the increase in construction which helps with the housing problem, and hoping for these construction guys to build even more? Don’t we want govt to work with them and make it easier for them to accomplish that?
Rennie is and has always been a marketer, not a builder. Less risky financially. But it was about a lot more than Rennie:
https://thetyee.ca/Opinion/2017/05/05/Clark-Not-Honest-About-Housing-Crisis/
Probably, if they ever have an adult again in the White House.
“We are desperate — desperate — for more people,” Mulvaney (White House Chief of Staff) said during the event in England, according to the Post. “We are running out of people to fuel the economic growth that we’ve had in our nation over the last four years. We need more immigrants.”
https://www.cnn.com/2020/02/20/politics/mick-mulvaney-immigrants/index.html
There’s lots of stories of big US tech opening offices in Canada with the crackdown in immigration in the US. Expansion by Amazon, Shopify, Microsoft in Vancouver will definitely be supporting at least the lower end of the housing market even further as incomes get dragged up. Wonder if the US will ever try to stop that flow.
Patrick said: “Do you also applaud the action taken by the BC govt in 2016”
Yes, but it’s more of a sarcastic slow clap than full blown applause, for reasons including those stated by StrangerTimes and Rush4Life below.
If BC Liberals had listened to voters earlier, had not waited until they were about to be kicked out of office, and had put more teeth in the policies, I would have given them a standing ovation — not to mention I would have voted for them.
But then what else could we have expected when for years the head of the BC Liberal fundraising arm was none other than mega-rich Vancouver builder, “condo king” Bob Rennie?
Gwac said: “BTW I am 100% for our immigration policy only way to keep the economy going and programs funded.”
Agreed, immigration does so much good.
At the same time, I can’t help thinking it is seems cruel to deliberately place newly arrived refugees in cities with very low rental vacancy rates and where they face such an uphill battle to ever owning. Surely it is better than the situations refugees come from, but I hope they are allowed to make some informed decisions about where in Canada they go.
At the same time, the “rich investment immigrant” program was such an unmitigated disaster, a terrible idea whose wealthy participants were measured as declaring less average annual income in Canada than recently arrived nannies (…whilst pricing so many people out of buying homes, and letting you and I pay much larger proportion of health care/education/roads and all other services that require income tax dollars)
Immigration done right is tricky…
LeoS, for the third time, is it possible for the listing realtor to manually input the correct assessed value?
It isn’t. VREB is above board in all the dealings I ever had with them.
Assessments are basically flat. No reason to hide them. Some are up a bit, some are down a bit. Hardly will have an impact and all of them can be looked up free of charge at BC Assessment. Absolutely it should be updated, but it clearly tells you it’s last year’s assessed value.
LeoM said, “I’m calling the response from the real estate board … BULLSHIT!!!”
It’s false advertising, mislabeling, etc, plain and simple. if it’s the wrong number it should be zeroed out until the code works properly; that shouldn’t be so difficult for the interim.
In what other monopolized industry would this be acceptable, much less a well funded one which deals in half million dollar or multimillion dollar transactions?
Nearly two months into 2020, this is UNACCACCEPTABLE.
Maybe the easiest to start is to call your local MLA? Any thoughts out there? Or is there a consumer rights lobby/organization that could take this to the appropriate levels?
802 Sherk St. is showing last year’s assessment even though its 2020 assessment is higher. So this might not be a huge conspiracy, just incredibly slow data synchronization.
Thanks LeoS for the update from the real estate board.
However, have lived through the Y2K years and being involved in mainframe computer systems, where we dealt with changes in field formats and interrelated field changes, I’m calling the response from the real estate board … BULLSHIT!!!
Updating a currency field to another currency field should be easy, even if there are dependencies of some kind. We didn’t have much trouble with Y2K date field conversions, we had trouble rewriting the code for date dependant calculations.
LeoS, can realtors update the assessed field manually when creating an MLS listing?
That’s only because you’re measuring in USD. The USD rose dramatically during that period as an even stronger safe haven than gold. But gold as was also a safe haven, rising 25% in CAD during the period you mentioned (2008), from $800 CAD to $1,000 CAD. https://goldprice.org/gold-price-charts/20-year-gold-price-history-in-canadian-dollars-per-ounce
That was the same story in 2008 with gold rising against most other currencies, except USD. For a Canadian, gold performed as a safe haven as expected in 2008. And so far in 2020 it’s up 10% (CAD) so it’s been working as a safe haven now too.
Gold peaked at USD 1000 early in 2008 and fell almost all the way to USD 700 late in 2008. But buyers do think it’s a safe haven, rightly or wrongly.
Yes, which is why it points to an “Armageddon” trade, and not just inflation expectations. Because gold also rises as a safe haven trade, regardless of inflation expectations.
https://business.financialpost.com/pmn/business-pmn/dollar-slams-yen-and-safe-haven-status-gold-gains
“Gold prices hit their highest in seven years as investors sought safe-haven assets after a rise in the number of new coronavirus cases in South Korea”
The bond and gold markets are actually disagreeing. High bond prices (i.e. low interest rates) mean expected disinflation or deflation. High gold prices mean expected inflation.
2020 Assessments, response from the real estate board. BC assessment has changed the format of the data that they provide to the boards And they are working with their vendor to integrate the new data format. They say they are getting pretty close and just signed off on the conversion process so hopefully we will have new assessments in a couple weeks or so.
Thanks, that looks great.
Stocks near all time highs.
But bond and gold pointing to Armageddon (related to Covid-19)
— 30 yr US bond yield at all-time low 1.89%, https://www.cnbc.com/2020/02/21/us-bonds-treasury-yields-in-focus-as-coronavirus-concerns-grow.html
— and gold at all-time high in CAD $2,173 https://goldprice.org/gold-price-canada.html
Usually the bond market is right. Why would anyone buy a home now, close to peak prices? Seems to be no discount offered for this black-swan uncertainty.
I do but I run a crazy deal on pre-sales so I prefer investors/repeat pre-sale buyers that are of limited work. This is the deal -> http://markojuras.com/pre-sale-condo-cash-back/
Problem with pre-sales is when there are good opportunities no one wants to buy and when the deals are bad everyone is buying. I would say less than 5% of people actually do was I suggest. One that stands out is a random guy called me Yellowknife 5 years ago looking for an investment around 500k. I told to buy two units at the ERA (new building on Yates) at 220k each, surprisingly enough he did. He hired a local management company to rent them out at $1,350 each and two years later we sold them for 362k and 350k.
The biggest assholes I ever dealt with we viewed over 100 homes and it always had to be Sunday afternoon/early evening. Then they bought privately and sent me a text message that I interpreted as mocking me. I wanted to write something nasty back, but I just wrote back “congratulations, good luck.”
Two years later I get the easiest client one earth. Looks at one house and buys it…..and it was a referral from the assholes.
Yes, this is also a good one. Lots of country-specific info including severity of cases. https://www.worldometers.info/coronavirus/
Yes, that’s a great idea and would solve the problem.
Hey Marko, do you ever help buyers with buying pre-sales? If so, what type of help? I’m assuming most people don’t even know what’s available.
Have reached out to them to figure out what is going on.
I wholeheartedly agree. Maybe I’ve been lucky, but as a buyer I’ve never been asked to sign one of those agreements, and wouldn’t sign if asked. Having said that, as seller or buyer, I’ve always paid full commissions, and have been happy to do so. And if I encountered one of those tiny buyers agents commissions, I’d make sure my agent got paid.
In any business, a client can be an a-hole and screw you around, but assuming people have integrity is the best way to deal with people, and just accept the losses and time wasted from the a-holes asa cost of doing business. And in my experience, one of the a-hole clients may feel some remorse and give you some legit business down the road.
Wow.. great find Leo! Thanks.
Green is private rooms. Red is complete homes or units.
What does the green vs red mean?
Teranet for those who care:
February 20, 2020
The 12-month rise of the national index has been supported by Eastern Canada
In January the Teranet–National Bank National Composite House Price IndexTM edged up 0.1% from the previous month, a so-so showing for a month of January. In only three of the last 10 years (including last year) has the January change been lower. The composite index was braked this January by declines of the indexes for Quebec City (−1.4%), Calgary (−1.1%), Victoria (−0.8%), Winnipeg (−0.7%) and Halifax (−0.1%). The other six indexes were up: Edmonton 0.1%, Ottawa-Gatineau 0.1%, Toronto 0.2%, Vancouver 0.2%, Montreal 0.5% and Hamilton 0.8%.
The markets that appreciated most in the 12 months ending in January were all in eastern Canada – Ottawa-Gatineau 7.9%, Hamilton 6.7%, Montreal 6.7%, Halifax 6.4% and Toronto 4.5%. The resale markets in these urban areas are considered seller’s markets. Twelve-month growth was minimal in the indexes for Winnipeg (0.3%) and Victoria (0.3%), and negative in Edmonton (−0.1%), Quebec City (−1.2%), Calgary (−1.6%) and Vancouver (−3.6%). This last market has been improving recently; its index has shown no retreat in the last four months.
Here we go again with condos!!!
Owners and strata councils want the government to step in and make the high insurance premiums go away, and presumably force lower deductibles.
Just like leaky condos, make the government fix it. Taxpayers should help pay, right? Wrong!!!
If condo owners don’t like their high insurance premiums then get the Strata Property Act, Part 9 changed so that insurance coverage is not mandatory, or get it changed so replacement cost is not mandatory. Get the law changed, but don’t expect us taxpayers to cover your costs.
https://biv.com/article/2020/02/new-west-condo-owners-launch-petition-response-insurance-crisis
LeoM said:
“2229 Belmont for example was just listed with last year’s assessed value of $940,000 which is wrong by $64,000!!!”
Was it a totally new, never before seen listing? I could see this happening if they were just reposting a listing from a year ago, after a long hiatus, and didn’t bother rereading the details.
Still, it’s not a good excuse. The seller’s agent is getting paid enough that they need to do this right. Or, worst case scenario, it was intentionally misleading.
In my experience realtors are extremely careful about the wording/details they will agree to put in a listing, lest they open up themselves to legal liability. Yet, I have seen the wrong assessed value in listings on various occasions. Bizarre.
In the case that the listing is going up right before the new assessed values come in, i can see how its easy to encounter the situation.
Solution: real estate board could mandate that any listing reference to assessed value (or relative to assessed value) MUST include assessment year in parenthesis immediately afterwards, or within the context of the same sentence.
E.g.
“…asking $20,000 below the 2019 assessed value”
Rental vacancy rate explained in one image.
AirBnB listings in Victoria
http://insideairbnb.com/victoria/?neighbourhood=&filterEntireHomes=false&filterHighlyAvailable=false&filterRecentReviews=false&filterMultiListings=false
The perfect side-hustle for a realtor. It’s like shooting fish in a barrel. I’m envious.
Reading the first few lines of this agreement makes me want to stop and just pay the realtors whatever they want.
Seems like that is easy to check out for yourself and not too relevant re. establishing market value? Maybe make a complaint if you are bothered: https://www.recbc.ca/complaints/complaint.html https://www.vreb.org/about-vreb/professional-standards
Funny, I was just about to add a comment with three other recently listed (yesterday and today) houses using last years higher assessment instead of the 2020 lower one.
It is just another tactic by those who lack honesty and integrity in an industry that permits it. That they do allow it, amongst a host of other practices that you can’t get away with anywhere else, with little to no regulation or recourse, says a lot about the “profession”. I have met and worked with some great, hard working, honest realtors that I have a lot of time for and I’m trying not to use too broad of a brush but this industry really does seem to have more of the unethical types than other “professions”. That’s just my thoughts. No data to support.
What is funny is that it is a tactic that really shouldn’t work as it takes about 8 seconds to determine if it is correct. Any buyer with half a brain would first look up the property in BC assessment (not just for assessed but to also take a look at sample sold properties nearby) then utilize the municipalities’ GIS maps and get a property information report completed. Those two pieces of info should provide any potential buyer with a good starting point in compiling information about the property.
That being said, a lot of people also blindly believe what is told or presented to them by “professionals” and lack some pretty basic critical thinking skills. Marko has demonstrated this over and over on this board in terms of commission structures and what a sellers agent really does, yet people still go with the full price model vice Marko’s mere posting model.
Should PCS reflect the most recent assessment? Absolutely. Would the industry have ensured 2020’s assessments were reflected on PCS had the average assessment increased 10% vice decreased? Absolutely they would have.
Am I surprised that they haven’t? Absolutely not.
Why don’t you write a complaint to the VREB?
Does anyone else find it criminal fraud that the real estate association and realtors are still using last year’s higher assessed values to mislead prospective buyers?
2229 Belmont for example was just listed with last year’s assessed value of $940,000 which is wrong by $64,000!!!
The actual assessed value is $876,000!!!!!
LeoS or Marko: when you create an MLS listing is the ‘assessed value’ field automatically input by the computer? If the answer is ‘yes’ then is it possible for the realtor to edit this field to enter the actual assessed value?
Maybe things have changed, but this is the standard buyer’s agent’s agreement we were presented with and the form appears to be the same today. We decided not to use an agent. I think a lot of people don’t read the agreement.
As for proceeding without an agreement on the basis of “integrity” – that seems like a really really bad idea. A realtor’s idea of integrity might be a full commission no matter what, and the buyer’s idea might something else entirely. The Real Estate Council does not recommend proceeding without such an agreement, stating:
The standard BCREA buyer’s agent’s contract states the buyer is responsible for paying any shortfall between the commission offered by the seller and the amount due and payable under the buyer’s representation agreement:
THE BUYER AGREES:
A. Not to use the services of any other brokerage or licensee, within the Market Area, during the term of this Contract;
…..
6. BUYER’S BROKERAGE REMUNERATION:
A. The Buyer will pay the Buyer’s Brokerage a fee of 3% on the first 100k and 1% on the remainder of the purchase price plus applicable Goods and Services Tax and any other applicable tax if:
(i) a legally enforceable Contract of Purchase and Sale between the Buyer and a seller in respect of property located in the Market Area is entered into during the period of this Contract; or
(ii) a legally enforceable Contract of Purchase and Sale between the Buyer and a seller in respect of property located in the Market Area, which is introduced to the Buyer by the Buyer’s Brokerage, the Designated Agent or by any other person including the Buyer during the period of this Contract is entered into:
(a) within sixty (60) days after the expiration of the term of this Contract; or
(b) any time after the period described in (a) where the efforts of the Buyer’s Brokerage or the Designated Agent were an
effective cause; provided, however, that no such remuneration is payable if, after the expiration of the term of this Contract, the Buyer has
entered into a similar written Buyer’s Agency Exclusive Contract with a licensed brokerage in respect of the Market Area and
the property is purchased during the term of that contract.
B. Prior to the Buyer making an offer to purchase a property, the Designated Agent will advise the Buyer of the total amount of
remuneration offered by the listing brokerage to be paid to the Buyer’s Brokerage for assisting in obtaining a buyer for that property.
C. Monies, if any, under Clause 6B shall be deducted from the amount due and payable by the Buyer under Clause 6A and the Buyer
shall pay any shortfall owing to the Buyer’s Brokerage.
D. The remuneration due to the Buyer’s Brokerage under Clause 6A shall be payable on the earlier of the date the sale is completed or
the completion date set out in the Contract of Purchase and Sale.
E. The Buyer’s Brokerage will advise the Buyer of any remuneration, other than that described in Clause 6B, to be received by the
Buyer’s Brokerage in respect of that property.
Most buyer’s never have a problem with this if they buy a house listed through a realtor as a cooperating commission is already in the legal agreement between the seller and their realtor already so the seller pays both commissions.
“Do you also applaud the action taken by the BC govt in 2016 that …
— brought in the foreign buyers tax 15%”
Christy Clark was dragged kicking and screaming to implement the tax because at that point public outrage was so overwhelming and the election coming up soon that she had no choice if she wanted to keep her job. This is what she said a year earlier in 2015 about the growing calls from the public to implement a foreign buyers tax.
“Clark said the government is trying to tackle the growing challenge of home ownership in Metro Vancouver, but is ruling out applying an additional tax on foreign buyers.”That is good for first-time owners, but not for anyone who is counting on the equity in their homes to maybe get a loan or use the money to finance some other projects,” Clark said. But any sudden change could have unintended consequences for those who already have invested in a home, the premier said. “By moving foreign owners out of the market housing prices will drop,” she said”
https://theprovince.com/opinion/columnists/its-summertime-flip-flops-for-christy-clark-on-housing-crisis
https://www.cbc.ca/news/canada/british-columbia/b-c-premier-christy-clark-opposed-to-taxing-foreign-homeowners-1.3072443
Common sense should have seen the foreign tax implemented in Victoria when foreign buyer numbers and prices spiked here following the Vancouver tax but no lessons seemed to have been learned from Vancouver
“Housing sales to foreign buyers more than doubled in Greater Victoria from September to October, prompting the B.C. government to increase scrutiny of the region’s real estate market. The latest statistics show foreign nationals involved in 55 sales in October compared with 27 the previous month, while their share of total sales jumped to 6.3 per cent from 3.3 per cent. The value of the sales to foreign buyers nearly tripled to $54 million from $19 million.
B.C. NDP housing critic David Eby said it was “totally predictable” that imposing a foreign buyers tax in Vancouver would drive speculators to the Greater Victoria and elsewhere. “I don’t understand why we’re in the situation again of the province saying they’re going to study the problem before they act. How high do prices have to go in the [capital region] before they apply the same tax?” “I don’t know why the government would force the [capital region] through the same angst and disaster that Metro Vancouver is still grappling with because they refused to act for two years.”
https://www.timescolonist.com/news/local/foreign-buyers-double-in-month-in-victoria-area-housing-market-1.3426754
I don’t believe anyone can predict the market so I never based my decisions on my market forecast. I buy pre-sale condos and some I keep as rentals and others I flip and I have one coming up for completion that I bought in 2017 that I will be re-selling.
I do not believe this to be correct. I believe the form for such a situation requires the buyer’s signature.
The topic was affordable housing, not money laundering. As much as I’d like to engage with you on the topic of ML, I’ve lost interest and moved on from that one. I (and many) have tired of the lack of tangible results, and just endless govt reports, commissions, beneficial registries and scheduled public hearings years away .
But good for you for hanging on to the dream that the govt will actually one-day prosecute and convict these moneylaundering bogeymen, and doing so will somehow lower your buy-in price for your Victoria house.
What can I say I’m an idealist
If everyone acted with integrity, most agreements wouldn’t be necessary.
I’m not sure if I would describe it as likely. Some agents do exclusive buyers agency contracts and some don’t. Some insist on it, and others ask but back down if you push back. I’m not a fan of those agreements (only benefits the agent although other agents will disagree with me there), but on the other hand I also don’t think it’s right for a buyer to use an agent to see a bunch of places then try to go around them to buy a place privately that was shown to them. If everyone acts with some integrity the agreement shouldn’t be necessary.
If it’s listed at $1, before the agent goes to their buyers they will go to the seller and ask for an appropriate commission for bringing the buyer. Only if the seller refuses would they go back to the buyers for a fee agreement.
If you sign a buyer’s representation agreement, which is likely if you are using a realtor, the agreement states that the buyer is responsible to pay the minimum commission if they buy a house privately or one that does not offer a buyer’s agent’s commission – usually for a period of six months.
Yes, and Patrick you forgot the part where they welcomed and even enticed millions and millions in dirty drug money to be smuggled into this Province.
“Since late 2010, the regulator — GPEB — had warned the Lottery Corp. (BCLC) to limit massive cash transactions involving Chinese VIPs at private baccarat tables, documents show.
But instead, Lottery Corp. managers did the opposite. They repeatedly raised baccarat limits, from $5,000 per hand to $100,000. And they refused to implement the regulator’s suggested “remedy” of capping VIP buy-ins with $20 bills — the denomination associated most with drug trafficking — to under $10,000.
And with an excuse that galled GPEB investigators, BCLC countered GPEB’s complaint in 2010 that VIPs were commonly bringing $200,000 or more in $20s per night to play baccarat — by arguing that wealthy Mainland Chinese businessmen had a cultural preference for gambling with bundles of cash.”
A statement from RCMP Supt. Bruce Ward in September 2017, then a lead E-Pirate investigator, outlines the scale of the Chinese VIP problems the RCMP finally revealed.
“The BCLC had identified in the year leading up to our file, $180 million in cash that came into the River Rock Casino. So that is bags of cash,” Ward said. “We’ve talked to these businessmen. It is not cultural. There is no reason in Canada to carry more than you and I carry in cash.”
More in the link below
https://globalnews.ca/news/5086278/b-c-liberal-minister-intervened-to-raise-betting-limits-ignoring-money-laundering-warnings-about-chinese-vips/
PS the foreign buyer tax was 15% vancouver only for anyone who isnt’ familiar – and for what its worth i do applaud those actions you mentioned but it doesn’t make up for anything near what they allowed to happen prior.
While you’re applauding ….
Do you also applaud the action taken by the BC govt in 2016 that …
https://en.wikipedia.org/wiki/Bill_28_(British_Columbia)
–
Interesting. And if the seller refuses the fee agreement, and sticks with the $1 buyer agent fee, are the buyers out of luck with a rejected offer, or does the buyer have some other options to end up with the home, leaving the buyers agent out of luck ?
Its not only government hiring…Its the hiring all the spending does by both the NDP and Fed liberals. Condo`s have been the main beneficiary over the past couple years imho in Victoria due to the Fed mortgage rules.
They take and give all at the same time while adding 300 to 400k new immigration that builds from previous years to demand housing. They rent than buy years after.
BTW I am 100% for our immigration policy only way to keep the economy going and programs funded.
Marko said: “…both him and his wife found employment with the government. If you have a bunch of people like them it does push prices up….”
I’ve heard talk of a rough cycle of mass (5/10%+) layoffs in provincial/federal jobs every 10-20 years (last time being during the Harper govt). If that is even a thing, when is the next one roughly due to hit? And, did the last cycle of government layoffs/tightening contribute/correlate to any change in Victoria real estate prices?
Depending on those answers, could be a useful indicator… or not.
You would get offers with “fee agreements,” where the buyer’s agent ask for a commission of X or X%. The fee agreement has to be signed by his or her buyer.
I like to be strategic with the cooperating commission. For example, set it at an amount where you think the buyer’s agent won’t bother going to his or her buyers. Very few agents will go to his or her buyers and say the seller is offering me only $10,000; can you sign this so I can ask for $11,500.
Thanks Marko. And I just saw your website, which has all this detailed and more. Great! From it, I see that the lowest possible commission to get onto the listings would be $899 + (buyers agent fee), and the lowest possible buyers agent fee would be $1.
If I’ve understood this correctly, that’s a total commission of $900 (+GST) vs $18,000 (+GST)…. wow!
Now I don’t imagine (m)any sellers go through with the $1 offer for buyers agents, but out of curiosity, what would/did happen if/when a home was listed like that?
Interesting point you bring up. I haven’t thought about it like that before but good example is I have a recent Croatian immigrant friend that is currently shopping for a house with a suite up to 750k (maybe 780k now that stress test is relaxed) on the Westshore, both him and his wife found employment with the BC government. If you have a bunch of people like them it does push prices up….
“When I have mentioned the NDP vs Liberals on this site, all I have only been talking only about real estate, since that is what is this site is about. I am not a die-hard NDPer, or even consider myself an NDP’er at all. But with respect to their real estate policies I applaud their taking some action that has actually started helping — and that is supported by 76% of British Columbians”
I respectfully disagree that the NDP and its policies have done anything to help buyers in Victoria. They have put some money towards low cost rentals. I would argue their overall spending has fueled the economy and kept prices from falling in Victoria after the Feds intervened with their mortgage rules. It was the Feds who put the brakes on the housing market in Canada. Yesterday was the start of them releasing the brakes. Anyways the biggest risk to the economy and jobs and housing is the NDP and liberals long term spending and policies. For those with recession proof jobs and looking for a house their is hope if the two tools stay in power longer term.
I’m not sure if everyone feels like this, but I do. I’m much more comfortable researching information from multiple sources online, making a decision based on reviews and comparisons, and having zero sales pressure.
I bought a house off CL and another just by word of mouth. No commissions for either party. CL is nowhere near as effective in terms of exposure as realtor.ca though. And houses do sell themselves if you get market exposure.
I do think selling a house privately can be very intimidating and confusing, and it can be time consuming. But potentially saving ex. $20,000 is worth some consideration and time. Besides exposure, pricing a home appropriately and staging it well seem most important.
gwac said: “CMHC and its stupid colors are as good as a kids coloring book at predicting housing prices.”
That is truly captivating, thoughtful, measured counter-analysis to CMHC’s quarterly report produced by an army of professionals. I guess I’m supposed to be on the fence now about whether to believe you or them?
BTW, the CMHC report is purported to be about “Housing Risk”, and I don’t see it say anything about predicting house prices. Let’s take it for what it reports itself to be.
gwac said: “Our ever increasing population and low interest rates created this. ”
Yes, agreed that was a major factor. But there have been other major factors, including the inflow of large sums of foreign money, especially by non-residents buying into Vancouver.
As the article validates, it is obviously not a coincidence that the policies enacted after the BC Liberals left office have helped mitigate the foreign money factor.
gwac said: “The NDP just keeps fueling the economy with its out of control spending…”
When I have mentioned the NDP vs Liberals on this site, all I have only been talking only about real estate, since that is what is this site is about. I am not a die-hard NDPer, or even consider myself an NDP’er at all. But with respect to their real estate policies I applaud their taking some action that has actually started helping — and that is supported by 76% of British Columbians.
The so called housing mess was not created by the BC liberals. Our ever increasing population and low interest rates created this. NDP has done SFA other than tax and spend and maybe delay housing price increases by a couple years. They have had zero impact on supply and have had a temporary impact on demand as people yet again think there will be a crash. Once again as in other cycles they will be sadly disappointed. The NDP just keeps fueling the economy with its out of control spending. which will only help get the next cycle going.
CMHC and its stupid colors are as good as a kids coloring book at predicting housing prices.
Has a link to today’s Financial Post article on a CMHC ( Canadian Mortgage and Housing Corporation) report been posted yet?
“Victoria is the only real estate market in the country still showing… a high degree of overall vulnerability,” but CMHC added that the imbalances are easing.”
Take a look at the “Housing Risk Report Card” chart in the story. Victoria is the only one out of sixteen Canadian cities in red, meaning that according to CMHC, a “High Degree of Vulnerability”. Ouch!
https://business.financialpost.com/real-estate/victoria-is-the-only-property-market-in-canada-still-flashing-high-vulnerability
As for Vancouver, as per the article:, “Vancouver, another major real estate market that has seen sky-high prices in recent years, is also showing signs of easing, amid government tightening.”
So, CMHC is confirming that that the provincial NDP’s (as well others’) new policies are actually working to help ease prices there. This is the cue for others here who know better than the CMHC to be “genuinely concerned” that the NDPs policies aren’t doing enough, and that we’re better off returning to the BC Liberals that got the province into the housing mess to being with. 😉
Yup.
Most people agree (even Marko) that realtors get paid way too much for the amount/difficulty of work they do. But, OTOH, most people don’t want to do that work and/or are intimidated by portions of it, so most people are willing to shell out the extra dough to outsource it.
Now if a private individual knocked on my door and offered to buy my house for the right price, would I seriously consider doing the transaction on my own with the help of a lawyer? Yes.
But selling my house from scratch is a another story, and I’d probably hire a realtor, like most people.
Competition board is very strict about preventing price fixing, and that has lead to the entire real estate industry being extremely squirrelly about saying anything about “standard” commissions because there shouldn’t be one. Reality though the vast majority of listings are 3/1.5% for the buying agent, which is 3% on the first $100,000 and 1.5% on the remainder. It’s also most common (though no data is collected) that the commission is equal split between listing and selling (buyer’s) agent so that means total commission is 6% on first $100k and 3% on remainder ($18k on your $500k place).
Lockbox is not a reduced service….less than 1 in 25 agents are present for condo showings.
For example if the commission is 6%100k+3%balance (****commissions may vary***) that is $18,000+GST gross (or a half decent car) typically split $9,000 listing agent/$9,000 buyers’ agent. Expenses for the listing agent are under $1,000. There is room to negotiate.
That’s good information. How about sample numbers, on a $500k condo, what is listing and gross commission for a typical full-service listing, and what kind of discount on the listing portion would one expect for reduced services (lockbox)?
It is very common sense. Sometimes I’ll create a one page sheet of things the house might have that you wouldn’t expect it to have like a NEMA 14-50 for charging an EV, hot/cold exterior water tap, plugs in all the closests (for Dysons), etc., etc…..takes 5 minutes and makes sense. Whether is actually helps sell or not, I don’t know. People buy homes for the strangest reasons.
Sometimes you have services hidden inside a wall so you print off a sheet “hook-ups for laundry inside wall” or similar and you tape it to the wall.
Or sometimes you provide an alternative floorplan that could be achieved with economic renovations if you think it might be of benefit for potential buyers to ponder.
“I have a network of buyers in Hong Kong” is not common sense but sellers fall for it every day.
House do sell themselves…I made this video 7 years ago in my trusty Civic -> https://www.youtube.com/watch?v=9CtoxjN3du8
My brother in law is a contractor and did some interesting high quality renos at his place before selling it. He produced nice custom info-cards that detailed what was special about the renos in each room for showings (like a museum might have). So he was able to convey unique features of the home without having to be there or have his listing agent there. Did it help in selling the place or getting a better price? Impossible to tell, but it’s another approach to conveying information about your place without being intrusive on buyers.
Most houses do sell themselves as long as they have adequate exposure to the marketplace where the buyers are (MLS). The majority of sellers could just DIY if they wanted to. However, it’s a task that most would rather outsource because the amount of money involved is intimidating, and many DIY sellers would not / do not take a reasonable, dispassionate approach to selling their own house and actively sabotage their own sale by pricing too high, getting too emotional, or not providing the basic selling services (easy to show, good description, property details, MLS listing, etc).
You basically need to weed out a ton of BS
Is there any value in your agent’s brokerage having a massive brick and mortar office when 95% of offers are done via DocuSign?
Once you weed out all the BS and focus on what is actually needed (professional photos and a few other things) interview agents and just straight up and tell them that the LISTING PORTION (don’t confuse with gross commission) of the commission is the biggest decision factor for you and see who is willing to set up to bat.
Marko, your general point about people’s hypocrisy when it comes to “saving” the environment is well taken, but paper wastage is about 739th on the list of top things society should/could be doing to move the needle.
As an introvert, I am so looking forward to my future purchase of a Tesla.
Reminds me of when I switched from Shaw to Juce for Internet: the modem arrived in the mail, no cable guy had to come to the house, and I never spoke to a human during the entire process. (By the way, I’m saving $660/year after the switch and my Internet speed is faster than with Shaw.)
https://www.juce.ca/ (local Victoria company)
Right, but Audi has to sell Audi E-trons, so maybe the online “lockbox” model wouldn’t be so smart for Audi. And by analogy, not every house for sale is a Tesla that sells themselves, some are “Audi E-Trons” that need to find the right buyer. If all houses sold themselves (like Teslas) , a simple free private sale ad on Craigslist would suffice, with no RE agents involved.
I have no problem with a lower commission based on lower level of services, in fact that is ideal. Of course it depends on what services and how much of a discount. For example, how much commission discount would you expect to get on the issue of lockbox vs no-lockbox?
My best car shopping experience of all time was with Tesla.
I would honestly pay $1,000 to $2,000 more on a car not to have to deal with a dealership/people/negotiations. Complete waste of my time.
When I go look for an electric car all of Tesla’s competitors are already at a massive disadvantage as I can put in an order for a Model Y online versus an Audi E-tron I would have to deal with people, no thanks.
I would think most buyer’s shopping for a condo don’t want the listing agent there selling them bs either.
Your logic is way off….negotiate the commission not services that are of zero benefit or even counterproductive.
Why are real estate commissions high? Perfect example, HHVer seller wants to sell and thinks listing agent being present is of benefit.
When HHVers that have purchased are asked the question and their replies are
The reason I threw this questions out is having attended 1000s of showings with buyers and been present as the listing agent on my own listings I’ve concluded it is a waste of time unless it make sense on rare properties.
Good Question Patrick: The house has enough strange things that having a very well informed listing agent would is discrete enough to stay out of the way would be helpful. On the other hand sold the Beverly Hills home with just a lockbox.
.
Barrister,
One of the reasons that the sellers agents might not be able to answer that question is that they havent attended previous showings where multiple people might have asked the same question, enabling them to research the answer, and thereby know the answer when I ask it.
Given the commission you’ll be paying, and your Scottish roots, are you saying you’ll settle for a “lockbox” showing too when you sell your house? Or, like me, are you wanting the listing agent there when it comes to selling your own house. If so, I don’t see where your position is different than mine.
Patrick, you are right that if you are dealing with a very unique house with different features than normal it might help to have the listing agent present. That is assuming that the list agent has the slightest clue about the renovations or special features of the house. I believe the general question arose in terms of garden variety condos.
Next time you find yourself at a open house for condos ask the showing agent what brand of windows where used in the condo or what brand of engineered floor is in the condo.
And….
Marko, just time to reap some of those capital gains and take some money off the table or do you feel perhaps the condo market might be in a bit of trouble in the near future?
And to answer your question, would never want the listing realtor at a viewing. Ackward and I can’t have an honest conversation with my spouse and our agent about the place.
My experience with Vancouver and Victoria RE agents has left the distinct impression that those in Vic have quite a “minimalist” ethos. Minimal effort, minimal research, minimal assistance. Perhaps we’ve just been unlucky on the Island.
If I was spending an hour of my time seeing, for example, a multi-million dollar 8000 sq ft Oaklands Heritage home that had been reno’ed – well yah, I can think of some questions other than how to turn off the lights. Let’s start with.. what was reno’d and could you show me please? I don’t think a phone call description a day later (if it ever came, and I still cared) would have the same impact. First impressions mean a lot, and one visit may be all you get from many people.
I only get paid if the property sells so don’t you think it would make sense for me to put in the extra effort if I thought it would increase the chances of a sale? On personal sales I literally print nothing. If I thought I could get more for my own product by doing something, I would do it.
When i was shopping for a condo ran into two listings where agent has to be present. One was 10 minutes late as he couldn’t find parking and other one didn’t know if parking was limited common property when I asked. Complete waste of time.. bought a condo that didn’t have listing agent present as it was the best value in my opinion
Well if/when the carbon neutral paper is shipped in a Tesla semi, are you OK with printing paper again?
And of course this has nothing do with a convenient “eco-excuse” for the extra effort and time it would take you to print materials, and carry and have them available at all times to clients that want them?
So, this paper is teleported to my office? No shipping right?
When clients ask I order some glossy brochures from Island Blue Print and drop them off at my clients’ house so buyers can pick them up only to throw them out. I just find it hilarious when you try to do something that is super common sense (really no need for print material) that is environmentally friendly you get pushback even thought everyone is preaching saving the environment.
Why impose your pet peeves on your clients who want printed material? If you think that the amount of paper that you print will damage the environment, spend some extra money and buy some carbon neutral paper instead. (e.g. http://treezero.com ).
After a few minutes reflection I cannot imagine any useful thing that have a listing agent present wold do when viewing a house or condo. Usually we can figure out how to turn on the lights. If a question really arises just phone them. Much rather see a listing without them.
Unquestionably prefer listing agent not present, in all scenarios.
Leo sent you an e-mail recommending himself, and Marko.
In my entire career literally not one buyer has ever asked me that. As I said before, when the listing agent has/insists to be present the majority of my buyers don’t like it.
So what if a client says “yes, I prefer the listing agent present”. If you find some listings to see, Is your answer “too bad, these happen to be lockboxes, and it doesn’t matter anyway.”? Or do you phone the listing agent and ask him to show up?
First we need to decide whether the various services (listing agent present, videos etc) add value. I think they do (btw- I’m no expert on this, it’s just my opinion)
But I have assumed about your “lockbox, lockbox, lockbox and they all sold” post, that you were saying that the listing agent being present doesn’t add any value (ie no higher prices or faster sale).
If we both agree that they add value, then yes, next step would be how much value, and I agree that commission rates would come into it to see if it’s worth the extra commission.
Kind of odd to compare a dentist that requires an undergrad and four years of specialized higher education and deals with your health, with a realtor who doesn’t need high school graduation to complete a course that takes three months. I’ve bought four homes at a discount without a realtor and am about to sell one without one, but I’d never do my own root canal.
This is not to say that realtors are not valuable for many people, but they are not essential to get the job done if you know how to figure the process out and have the skill set to market your own place. For our most recent purchase I negotiated almost the full purchaser’s realtor’s commission as a discount from the selling price and the listing realtor agreed to this with her seller. It was a win:win as the realtor got slightly more than the listing commission, is no longer able to double-end the commission anyway, and looked good to the seller when she reduced the commission.
In my view, the really valuable thing is to have access to the realtor.ca system.
What???? So If I call three lawyers I am not going to take into consideration their respective fees?
Okay question to HHVers. You are shopping for a condo.
Would you prefer the listing agent present?
Would you prefer the listing agent not present?
Please keep in mind real life considerations. For example, if looking with no listing agents present you can move at your own speed from condo to condo. If listing agents are present you need to show up at specific times which means you get too much time in units that are immediate write offs and not enough time in the units that are on the short list.
For example, I’ll schedule three condos
4 to 5 pm
4:15 pm to 5:15 pm
And 4:45 pm to 5:45 pm
So.you have 1:45 hours for three condos but you can split that up accordingly based on interest level. Can’t do that if you have to meet an agent at 4pm then 4:30pm then 5pm.
Lots of other reasons listing agent present doesn’t work well but I need to get back to closing up a few deals with my “top negotiator” skillset.
The one with listing agent present etc. won’t sell for less than the identical ones, and may sell for more. It sounds like you agree with that, because you needed to make the commissions dramatically different in your example, which isn’t the typical case with full-service realtors (you don’t get a commission discount with a lockbox). If you restate the question with identical prices and identical commissions, I think the one with listing agent present etc, would sell faster, as that’s a basic principal seen with selling anything. Would you buy a $100k diamond from a lockbox-type of sale where the rep wasn’t even there?
By analogy, identical cars get sold for different prices at different dealerships, and the “no frills” “auto-broker” dealerships are not the ones getting top dollar.
Fancier car….you can’t be serious? Leo….is this a legit IP address?
Can you provide an example of where a realtor sold TWO UNITS (can be different buildings) above market value in relation to other sales in the complex, because I have some personal condos coming for sale and I would like to hire him or her.
That being said, I’ve been in top 1% of sales for 5 years now….must be because I bought a Tesla in 2015?
“Do those realtors specialize in searching out really dumb buyer’s agents with really dumb buyers that don’t know how to search comparable sales within the building?”
I don’t know what they do. Maybe they are just lucky. But there is enormous unit to unit variance in condo sales prices, even when the units are effectively identical. Is it just because not very many change hands? Do some realtors negotiate better? Drive a fancier car? Set a better initial price? Stage better? Again, I don’t know. But I want one of those people in my corner.
For what it’s worth, I also try to find good dentists even thought they all do effectively the same thing and charge the same amount.
@Panko. Sent you an email.
Do those realtors specialize in searching out really dumb buyer’s agents with really dumb buyers that don’t know how to search comparable sales within the building?
I don’t know why I even bother. I should just be happy that there is literally zero common sense out there and as a result I make a lot of money flipping paperwork on my desk.
I’ve posted this on HHV at least 10 times in the last 10 years.
You have a condo on the 10th floor listed for $500,000 and the commission is $10,000
You have an identical condo on the 10th floor listed for $510,000 and the commission is $20,000
You have yet another condo on the 10th floor listed for $520,000 and the commission is $30,000
Which one will sell first? Will the buyer go for the $520,000 because the listing agent is present for showings, has drone videos, 3D virtual tour, and the rest?
This is a huge pet peeve of mine. I have to listen to “save the environment” bs literally every day. Then when people come to my open houses and I tell them I didn’t print the floorplan because it is available online, they look at my like an idiot. Let’s face it, no one cares about the environment.
I always cringe when the sellers ask me to print glossy brochures knowing that my buyers just chuck them in the garbage.
So nobody has a recommendation for me? I do appreciate the opinions and thoughts about the industry, but I was hoping someone would have the name of a competent person for me.
If I’d have asked for a recommendation for someone to install solar panels, would you have told me it makes no difference because all they do is attach panels to your roof?
Thank you! This is exactly what my buyers say when we run into the listing agent. A lot of present listing agents just go sit in their car cause they know the buyer and the buyer’s agent want privacy, but they told the seller they would be present 🙂
Listing agent being present is a MARKETING TACTIC 95% of the time. First of all, 5% of the time it makes sense for the listing agent to be present. For example, 10 acre hobby farm with multiple outbuildings, wells, septic, etc., it helps to get a bit of an explanation.
95% of the time you interview three agents and they say their commission is 3% (commission may vary) so to get a competitve advantage one of them says……..3%, BUT I’LL BE PRESENT FOR EVERY SHOWING. Unit sells and then the seller thinks it sold because the listing agent was present, when really it would have sold either way.
I sold two personal properties last year plus a home my father and I built; lockbox, lockbox, lockbox.
One of the three properties was at the Bayview Encore where I probably know the building better than anyone in Victoria as I bought multiple pre-sales, did multiple assignments….like I know the small discrepencies between the disclosure statement and the finished product BOSA delivered.
When it came time to sell my personal unit, a luxury two bedroom condo, I put on a lockbox. Why? Buyers walk in and either they like it or they don’t. If they don’t like the view how am I as the listing agent going to turn them around?
Same with the houses my father builds….first 5 houses I sold I was present for every showing….COMPLETE waste of time. Now I don’t bother, lockbox and go. If the buyer’s agent has a question they can just phone me. Buyer could care less if it has TJIs or 2x10s…either we got the kitchen colour right or we didn’t.
Panko said: “I have certainly noticed that some condo realtors end up with higher sale prices than others in the buildings I watch.”
You want to exude luxury?
Hire yourself a well spoken, classy, sharply dressed, personable but slightly elitist extremely attractive and ever-so-slightly flirty male/female model to do the showings. Supply them temporarily with a late model luxury vehicle to meet buyers outside. Make sure he/she drops into conversation, several times, that this is exactly the kind of place/he she would buy if she he/were in the market to buy right now.
Your place will exude luxury.
/ That is not serious advice.
// But what is real, is how the Realtor industry itself works so hard to tell us all that the Realtor’s looks are such an important part of all this. I find it bizarre for it to be so common to see photos of Realtors featured prominently in so much advertising for their services. Arms crossed, confident pose, back-to-back with a partner realtor, etc, etc.
If they can do the job well, why should I care what they look like? Same for my investment manager, my auto mechanic, my …. etc.
Virginie Said: “as I had important questions that couldn’t be answered, and my agent was as clueless about the place as me.”
Exactly. The buyer’s agent will say, “I’ll find out”. Yeah thanks, I have the ability to pick up a phone and call the seller’s agent, too.
I recently sold a Condo in the lower mainland and it had a few negatives. I called a few Realtors and hired the the one that said she would not put on a lock box and do all the showings in person. In my case the buyers were first timers and had a young inexperienced Realtor, and my selling Realtor was able to explain everything and smooth over the negatives!
I was very surprised to find out the listing Realtors still did showings, and in my case I was very happy with my decision as I had very few showings and because of my Realtor, the Condo still sold quickly and close to the asking price!
The selling agent was there at two showings when I was looking for my house. Both times I wished they hadn’t been there, because it makes it impossible to talk candidly with your spouse or your agent. Also, it’s not like selling agents necessarily know anything about a house until they’ve relayed the questions to the owner.
“Right now we have a strong pipeline of infrastructure and rental construction in the province which support employment…”
Ah, I see what you did there, very strong, er maybe.
Good article on income vs wealth in Canada
https://homefreesociology.com/2020/02/19/wealth-vs-income/
The poster (Panko) wasn’t expecting “magic”, specifically he asked for something reasonable.. “ Someone who will work hard and aim for top dollar rather than just go through the motions.”
stuff like…
Some RE sellers’ agents will argue that, in their experience, all of those points above make no difference, and doing them can even hurt chances of sales (e.g. “better to not provide information so that they will phone you to ask questions”). In the absence of hard evidence, those kind of statements strike me as self-serving opinions.
Thanks for the input Leo and Marko. I’m not looking for magic, just competence. My thinking is that a good realtor will be better at initial pricing and negotiating/closing the deal, but perhaps I’m overvaluing that side of things. I have certainly noticed that some condo realtors end up with higher sale prices than others in the buildings I watch.
Barrister, my use of the term ‘luxury’ was an attempt to classify it properly as per the local lingo so that I’d get a good recomendation. To me it’s just a condo, but it is a different type of dwelling the $400k-$500k condos and thus aimed at different buyers. And no, I don’t need a realtor to fix my cabinets, but an informed opinion on what I should fix would be valuable.
Even this is a stretch…..lockbox 🙂 As long as he or she is conscientious about answering and confirming showings.
There are a few basics like order the strata documents ahead of time and hire a half decent photographer but yea.
10 years and 800+ sales under my belt Leo is right there is no magic. The fact the 98% of sellers believe there is “magic” is why commissions are so high and there has been zero downward pressure on fees.
I represent 30-45 buyers every year and trust me there isn’t anything magical the listing agent does. My buyer emails me to book a showing, we go view it and either the buyer likes it or doesn’t, or sees enough value or doesn’t which is a function of pricing. Simple enough.
There is no magic that an agent can do to sell a place. There is a minimum level of competence for the description / photos, and then there is some effort that can go to staging, pre-marketing (e.x. agent tours). I do see the value in proper staging as impressions do matter. After that it’s the market and the listing agent has no influence on that.
Panko: Exactly what are you expecting the realtor to do personally paint the apartment and fix the cracks in the kitchen cupboards? Other then putting it up on MLS and writing a good description there is a pretty limited amount that a realtor can do when it comes to selling a garden variety condo. As long as he is conscientious about showing it which most are then it really does not matter.
But I would love to get other peoples opinions.
PS: Why is almost everything described these days as luxury?
I’m looking for a recommendation for a selling realtor. Someone who will work hard and aim for top dollar rather than just go through the motions. Property is a ‘luxury’ condo in Victoria, worth about $850k-$900k.
Marko thanks for the explanation on why some open houses happen despite an accepted offer in place. Still frustrating as a potential buyer to not have the info disclosed but makes sense why some keep it private until unconditional.
There’s always Tahsis. It will take a while before the gentrification hits there
Hah, thanks.
Sounds good!
Good ol’ Vancouver.
We do live in a lovely part of the world. The air is still crisp, but the daffodils are beginning to bloom and I saw three different people mowing their lawn this afternoon. Not bad for mid-February in Canada.
Yes, that looks correct, and for 2018, the threshold for Victoria is $214k to get into the top 1%. https://www.huffingtonpost.ca/2018/03/14/top-one-per-cent-canada_a_23385825/
There are of course other ways for a non 1%er to be affected for a single year, such as selling a business or commercial property. Tax rates do affect where rich people choose to live and have businesses. In the past, our top rate of 43.7% was a factor bringing people to BC. That’s long gone now.
For example, Washington State has no state tax, so top income tax rate is the federal one at 37% (which doesn’t kick in until after 500K). There’s some other taxes like social security, but nothing close to BCs 53.5%. marginal rate. .
“Budget had projected property transfer tax revenues to remain stable at around $1.9 billion over the following three years. But this year’s budget shows it dropped to an estimated $1.54 billion for the 2019-20 fiscal year” https://vancouversun.com/news/local-news/b-c-budget-2020-record-housing-funding-but-still-no-renters-rebate
No kidding eh? I’m shocked.
From the article I wrote last year: https://househuntvictoria.ca/2019/02/21/the-left-and-right-hands-of-government/
Also their prediction that it will only increase to $1.58B this year will also likely be way off given how the market has come back.
According to this source based on the 2016 census, you are into the 1% Canada wide if you make over $230K/year. Granted it’s a few years out of date, but I doubt the bar has risen all that much.
https://www12.statcan.gc.ca/census-recensement/2016/dp-pd/dv-vd/inc-rev/index-eng.cfm
gwac said: “End result they will probably collect less from that [rich] bracket as people find ways to make their take home pay look less”
They’re waaaay ahead of you.
From a 2017 article
“[Richmond, B.C.’s] child poverty rate is 25.6 per cent, higher than any other metropolitan area (not including specific cities) in Canada. Not to dismiss very real poverty that exists in Richmond, Yan said the figures are likely skewed due to underreporting of income.” ( https://www.richmond-news.com/news/poverty-level-income-tax-filings-prompt-questions-in-mega-rich-richmond-b-c-1.22946657 )
Remember, when mom and the kids are living in a multi million dollar megamansion and driving around in BMW’s, but the statisticians simply record her as not working, that right there is what is broadcast as poverty.
I remember a few years back, when in one of her speeches Christy Clark bragged about how she was fighting the good fight against the “highest poverty rates in Canada, in our very own Richmond, BC”, I nearly spit out my coffee. That there’s some chutzpah.
I personally know of several cases over the past several years where wealthy Richmond families have been granted government subsidies based on their low-income status, while right next to them hard-working income-reporting families naturally get no subisidy.
I hope y’all have been enjoying paying your tax dollars to subsidizing not only the rich, but rich people that don’t report income here! Its simply a matter of: if there’s a loophole that can be exploited, some people are going to exploit it all day long.
Another option: https://www.telus.com/en/bc/health/personal/babylon
You don’t need to wait in the walk-in for a prescription renewal. You can do this online now. https://www.vivacare.ca/telehealth.html
I’m cool paying my fair share of taxes but we aren’t really getting very good bang for the buck. My buddy in Langford has been unable to fill his inhaler prescription at a walk-in clinic where the wait isn’t 2hrs or more. And $220,000 while certainly not poor, shouldn’t be considered rich either. Everyone loves to talk about 1%ers, and in Canada you have to be north of $470,000/year for that designation. The NDP are poking the bear at their own risk here, especially with the sales tax, property taxes and everything else in BC.
I suppose we can take some solace that as a point of reference Sweden’s top tax rate is 57% once you are earning > 675,700 kronor ($91,000 CAD at current exchange rates) Of course, I think Sweden’s social programs are far better than ours.
its all about sticking to the so called rich and how it plays to the NDP base. End result they will probably collect less from that bracket as people find ways to make their take home pay look less. Stupid politic but typical NDP. Keep taxing until there is no one or nothing else to tax. I am sure his base will go bat shit crazy at the Netflix sales tax. That was well hidden in the budget for some reason.
This article is for you Introvert: https://www.nytimes.com/2020/02/13/business/economy/housing-crisis-conor-dougherty-golden-gates.html
Combined with the Feds 2020 highest rate of 33% over $214k, that makes the combined highest marginal rate in BC now 53.5%. (Alberta is 48%). That rate was only 43.7% most of the time in the “good old days” under the BC Libs/Fed-PCs (before the Fed-Libs and Prov-NDP took aim at the rich). That 53.5% marginal rate will likely scare off some wealthy people (and their jobs/businesses) from moving or staying here, hurting the economy overall. And of course make it harder for anyone to ever become wealthy in the first place.
54% for those making over $220,000……sigh. Accountants must love it tough, now even more people have to incorporate and make their life more complicated versus just focusing on work.
Looks like Leo needs to start tracking the Royal factor
‘Megxit’ effect could turn Vancouver Island ‘into the next Martha’s Vineyard’
https://www.nbcnews.com/news/amp/ncna1136416
Today’s B.C. Budget summary:
Since 2010 productivity in Canada has grown faster than in the US. In the 10 years before that US productivity grew significantly faster than in Canada.
https://data.oecd.org/lprdty/gdp-per-hour-worked.htm
Note that this data is normalized to allow easy comparison of growth. The absolute level of productivity in the US remains quite a bit higher than Canada.
Bottom line – Canadian productivity is lower than US and many EU peers, but the problem has not gotten worse in the last 10 years
“This is what has me worried as well….lack of productivy can’t last forever”
Nope it can’t. Our country is also becoming very difficult to invest in. You cannot continue to doll out money like the liberals do and also be business unfriendly and destroy your natural resource sector. It will eventually come crashing down especially having a consumer who is getting tapped out.
The trick of getting around this by letting a lot of people in the country will also not work long term.
Without government spending and employment right now not sure where we would be.
Chatting with a developer in the Okanagan of mostly custom single family, some smaller multifamily developments. After a very quiet fall that had them concerned about work, the spring is very busy again. They say 30-40% of their buyers are from Vancouver (they are outside of the spec tax region)
Great article Leo.
There’s a long term Labour trend across Canada, and also seen in Victoria (Labour force survey). That is a shrinking Labour force, as measured by participation rate, mainly due to aging/retiring people leaving the work force. It’s fallen in Canada from 67.6% to 65.4% over last 10 years, representing 3.3% fewer people in the work force per capita(see link) . By analogy, it’s more people sitting on the wagon that are pulling the wagon.
So the ultra low unemployment rate in Victoria seen in the Labour force isn’t just from extra jobs, it’s from less people in the work force (as a % of total population). Note that population increases, mainly from immigration, keep the total jobs numbers moving in the right direction, but not enough to stop the Labour participation rate (% of total working age population that is working or looking for work) from falling.
https://www.cbc.ca/news/business/jobs-canada-boomers-1.5006705
This is what has me worried as well….lack of productivy can’t last forever.
IMO, the last thing the RE sector needs is more stimulation.
Gawd I feel like I keep watching the RE market for the same reason gawkers stand around and watch slow motion trainwrecks…
It’s expected from the throne speech that today’s BC budget at 1:30pm will address some of the recommendations from the housing task force https://bc.ctvnews.ca/how-can-b-c-solve-the-rental-housing-crisis-task-force-weighs-in-1.4215697
The first recommendation is to crack down on “renovictions” (forced evictions from renos). That seems like a good idea, and hopefully they can do it in a way that both renters and landlords can live with.
Other than that, people are expecting a “stand-pat”, balanced budget… which sounds good to me.
I don’t know how long our economy going to be able to hold on with health care, social assistance, and public admin growth/costs out pace the rest of the sectors.
Stress test rate is being revised: https://www.osfi-bsif.gc.ca/Eng/fi-if/in-ai/Pages/bnchrt-let.aspx
Basically as I understand it, the rate will now be market rates + 2%, rather than greater of contract rate + 2% or published 5 year rates.
The effect will be a slightly lower stress test hurdle, allowing some people to pass more easily.
Nice writeup Leo. Yes, government is on a freeze right now but we will see if that persists with the budget drop today (or maybe they won’t mention it). They are losing 1 billion from MSP which they got last year and there is quite a bit of economic uncertainty so I would expect the freeze to stay put but who knows.