In this crazy time of COVID-19 money is getting tight. Bills are piling up, banks and other lenders may be offering deferred payments. Look for these risks before skipping a payment and keep your credit healthy through this uncertain time.

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Strata and Condominium insurance coverage in British Columba has recently faced some serious increases in premiums. Of special note in B.C. is that duplexes, triplexes, townhomes, patio homes and condominiums are all considered a Strata Unit.

Many factors have led to this increase, here are a few:

1. Insurance premiums have been rising for all types of coverage, including homeowner insurance.

2. Condo/Strata insurance premiums have been very low for a long time.

3. The rebuild cost if an entire condominium complex is destroyed can be astronomically high in some areas.

4. Water-related losses are the number one claim from Strata to Insurance companies.

5. Some Strata have used insurance claims to provide maintenance to their buildings

6. Fewer insurance companies want to take on the risk of insuring condominiums.

The hardest-hit Strata complexes are going to be complexes that are extremely expensive to rebuild, self-managed Strata buildings, Strata buildings that do not have a depreciation report and Strata buildings that have had a lot of claims.

Ways that Strata Councils can save on their insurance premiums are

1. Have depreciation reports to provide to the insurance companies. This provides confidence that due diligence of maintenance is being conducted by your strata.

2. Increase the deductible for a loss. When I lived in Vancouver our deductible was $50,000.00. Some Strata complexes have deductibles as low as $2500

3. Ensure all hot water tanks are less than 10 years old, that plumbing for dishwashers and washing machines are up to date and to modern-day code, deal with any water leaks immediately, regardless of how small.

4. Ensuring there are a minimum of insurance claims presented by the strata corporation.

5. Weigh the cost of remaining self-managed versus hiring a property management company.

As a consumer, you can protect yourself by purchasing a Strata Unit Owner’s Policy. This covers the strata’s deductible, contents insurance, liability and coverage for any unit upgrades that you may have done. You can purchase earthquake insurance, jewellery and art riders and other additional insurance add-ons.

If you are planning on purchasing a Strata Unit, the below clause is something you should consider when putting in an offer. This will ensure that you are afforded the opportunity to review the strata insurance documentation and that you are able to receive proper insurance coverage for your purchase.

This offer is subject to (A) the Buyer reviewing and approving the terms and rates of the strata corporation’s insurance, including the premium amounts, deductible amounts, and coverage limits thereunder and the date of expiration of such policy or policies; and (B) the Buyer confirming the Buyer’s ability to obtain personal strata owner’s insurance on terms satisfactory to the Buyer, including coverage for any owner’s portions of deductibles payable under the strata corporation’s insurance, in each case on or before ________________. These conditions are for the sole benefit of the Buyer. Immediately upon execution and delivery of this Contract of Purchase and Sale by all parties, the seller or the Seller’s agent will obtain copies of the strata corporation insurance policy or policies, and will immediately, upon receipt, deliver such document(s) or cause such document(s) to be delivered to the Buyer or the Buyer’s agent.

If you are selling a Strata Unit, I would strongly recommend that you obtain the Strata Corporations insurance policy to have readily available to potential buyers. If you can provide certainty around your strata premiums that will give you a leg up against other competing strata unit sellers.

For further information please speak with your Insurance company. The below link is a guide to Condo Insurance in British Columbia and is provided by the Insurance Bureau of Canada

http://assets.ibc.ca/Documents/Brochures/Condominium-Insurance-in-British-Columbia-BC.pdf

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The government pendulum has started to swing a little bit back after the extreme measures it took back in 2017 when it slashed the purchasing power of home purchasers by 20%. The stress test has affected almost all mortgage holders including seniors, home purchasers and people renewing their mortgage. Adding 3% back, limited to mortgages with less than 20% down payment, is too little. Let’s see how it works out in several examples below.

The new rule will take an average of the top banks 5 year discounted fixed-rate and add 2%. Currently,the Bank of Canada is using the posted 5-year Conventional Mortgage rate offered by the big six banks.  This artificially inflated rate is not truly representative of average contract rates offered by banks, credit unions and mortgage finance companies. 

The Big Six Banks tend to keep their posted rates very high to ensure that when a client is breaking their mortgage the interest rate differential penalty will make the cost to break the mortgage prohibitive. It also keeps people stuck at their current mortgage lender because they are now unable to qualify with the artificially high rate that is currently in place. The “posted” rate has very little to do with the actual mortgage rate a consumer is going to receive.

What impact will the new qualifying rate have?

This new qualifying rate is only for mortgages with less than 20% down. Mortgages with more than 20% down currently still must qualify at the higher rate. As if the mortgage industry is not confusing enough, once again, people with larger down payments get the short end of the stick. This policy may change and there are “discussions” around the qualifying rate for a client with more than 20% down payment.

Let’s assume you have 5% down and want to buy a house.

Currently, you would have to qualify at 5.19%. As of April 6, when this gets implemented, you would qualify at 4.89%. Mathematically you will get about 3% additional in purchasing power. Not a game-changer by any means but every little bit helps.

What does this mean for your income level?

*For the above qualification I used a 25-year amortization, property taxes of $3570 – $570 Homeowner Grant = $3000, Heating of $75 per month and GDS of 39% and a 4% high ratio insurance premium. Everyone will be a little bit different. For the lower-priced properties, the taxes I used will be high, but there will be condo fees to compensate so the numbers, although not perfect, will give you an idea. 

When I lived in Vancouver, I had a really hard time accepting the price of Real Estate. Bill Macklem, a mortgage broker I have known for years, gave me some great advice.

He said, “if you can afford the mortgage payment, and the interest on the mortgage is less than your rent, you are further ahead with buying.”

I came home, gave our landlord notice and cashed out some RRSPs to buy a condo. In the future, I would not put in my notice before actually finding a place to buy. We were almost homeless for a bit.

With rates as low at 1.99% for a 3-year term with HSBC, if you make $60,000, at 5% down you technically should be able to qualify for a $419,889 mortgage and a $440,883 purchase price.  That is $156,192 difference. That is why so many people are bringing on co-signors. 

If you are comfortable with the mortgage payment amount, figure it out. Consider bringing on a co-signor, selling anything you don’t “need.” Get rid of subscriptions, sell your second car, buy a house with a suite. Whatever it takes. It is worth it. Home is Worth the Effort.

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Spring is rapidly approaching and with the better weather comes a great opportunity to sell your home. The “Spring Market” is when the most homes sell, with the largest mortgage closing dates across Canada being June 30, July 31 and August 28. People want to move at the beginning of summer which means they start looking for houses in March and April. If you are considering selling your house this spring, now is the perfect time to start getting your house ready to sell. The first step is to take a step back and look at your house as if you are a buyer. Pick apart the big and little items that a buyer may not like. Determine if those items can be fixed or if you are willing to accept the fact that not everything is perfect.

A great way to start is to have a building inspection done on your home. When someone buys your home, they will generally hire a building inspector to look at the house from top to bottom, inside and out. If you get a building inspection and fix a lot of the items in advance this is a great selling feature.

You can even have the building inspection on display at the house and mark the items you have fixed. If your home was built before 1994 and has vermiculite insulation, you may wish to get this tested for asbestos. If there is no asbestos, you can provide the paperwork to show there is no asbestos. If there is asbestos, you can have it remediated prior to selling your home. If there is asbestos found in the insulation and it is not remediated, most mortgage lenders will not give the buyer financing. This limits the number of people who will be able to purchase your home.

Having perimeter drains flushed and working, gutters and drains moving water away from the house, fences fixed and upright all help in selling your home. Fixing all the loose ends such as electrical outlet covers, baseboards, loose handles and any other items you know should be repaired. Go into the attic and look for mould and ensure that air is circulating properly. It is about giving buyers the confidence that the house they are going to buy is loved and cared for by you, the seller.

Does your house look too lived in? Does it just need a deep clean or does it need to be repainted? If your walls are crazy colours, consider repainting in neutral colours. If you have carpeting, consider getting them professionally cleaned. Before listing the house have professional housekeepers come in for a day.

Declutter, declutter, declutter. You must pack anyway, so start packing now. Get all “Maria Kondo” and keep the end in mind while clearing your space. Pets – love them but they smell. You may not be able to smell your pet, but other people can smell your pet. If it is a caged pet, remain extra diligent with cleaning out their cages. If you have hairy pets, remove hair from everywhere, clean or change their beds and ensure their eating area is out of the way. Change kitty litter constantly, remove doggie doo from the back yard and try to make the house look like no pets live there.

Teenage bedrooms – I get it, I had a teenager once. It was smelly. I am not sure how you are going to get your teen's bedroom clean, but it must happen. Maybe buy them a package of fancy coat hangers, new bedding and create an incentive for when their room is clean. Possibly give the housekeepers danger pay and send them in with a Hazmat suit. Whatever you decide, the room, closet, under the bed, behind the dresser, it all needs to be clean.

Now, pretend you are a buyer. Drive up to your house with fresh eyes. What do you notice? What do you like and not like? Walk up the stairs and unlock the door. What is your impression? Walk into the house. Where do your eyes go first? Do you need a plant, to remove a painting, add a rug? Does it feel inviting? Does it smell nice? Does it look like a home that is loved and cared for? Do you remember why you bought the house? Do you remember the great memories created in your home? This is why someone is going to buy your house. They want to have a home to create memories in, have security and become a homeowner. With these extra little tips, you can create more value and make your home as marketable as possible.

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When you are considering doing some renovations with the idea that the new look will increase the value of your home, there are some choices that are better than others. Some of the best return on investment reno's might even surprise you.

During a recent study by JLC Group’s Remodeling Magazine, they established some costs versus value trends in 2019. What has the biggest bang for the buck? Replacing your garage door.

That’s right if your garage door looks terrible, go ahead and replace it. You will recoup an estimated 97.5% of the cost. The next best value for the cost is changing the façade of your home. If you have grungy old vinyl siding and replace it with something updated and fabulous, you will recoup an estimated 94.9% of the cost.

It is really the outside of the house that gets the economic go ahead. A deck addition, siding and new entry door all come in around 75% of cost recovery. The only indoor A+ return is a new kitchen. This is not surprising as so much of our time is spent inside and around this home hub. At an 80.5% cost recovery, go ahead and fix your kitchen, just remember to not go overboard.

You heard me, overboard. Upscale renovations just don’t get the required payback. The worst pay-off is an upscale master suite, bathroom or kitchen renovation. Midrange reno's had a much better return on investment. I know you personally might want a second kitchen inside the kitchen, 2 ovens, a baker centre and 3 sinks, but at the end of the day, don’t expect to get your money back out when you go to sell.

Your home is your castle and not all renovations are going to increase the value of your house but they may be worth it to you. That’s okay as this is where you live, where you create amazing memories and where you provide a haven for family and friends. 

If, on the other hand, you are doing the renovations in preparation to sell your home, reach out to me first and we can discuss whether the change is going to be worth the time, effort and cost. Sometimes it is and sometimes it just isn’t.

April 3, 2019

Thinking about buying a property located in the Agricultural Land Reserve (ALR)?

As of February 22, 2019 the BC government has introduced a few changes to the Agricultural Land Commission (ALC) Act which affect the size and number of dwellings allowed on a parcel of land in the ALR.

KEY CHANGES:

• ONLY ONE RESIDENCE PER ALR PARCEL IS PERMITTED

• THE PRINCIPAL RESIDENCE CANNOT EXCEED 500 m2 (5,400 sqft)

Previously the ALC Act allowed additional dwellings for farm help or immediate family members. This meant that manufactured homes could be brought onto the property or accommodation above an existing farm building could be constructed. This is no longer true. These types of dwellings would now be considered a "non-adhering residential use" and must now be approved through an application process.

Because there are many homes in the ALR which already have more than one dwelling, the Act contains some grandfathering provisions. Carefully refer to the Act and Bulletin No. 05 to see which provisions apply to your specific case. 

Links

ALC INFORMATION BULLETIN No. 05

ALC - Agricultural Land Commission

Buying a house can be a stressful, emotional experience. This list of the top ten things to look for when buying a home will come in handy when emotions are running high. Go through the list and verify the condition of each of these items. It's not necessarily a deal breaker if one or more of these items need repair, but it does give the buyer some solid negotiating power to ensure the items are fixed or accounted for in the final purchase price.

1. Foundation

My dad often said, "I'm glad you have a solid understanding". Of course, he was talking about the rather large size of my feet but the exact same thing is essential for your home. Whether the home you are considering has a full basement, a crawlspace, post on pad, or slab on grade, look for signs of deterioration. 

Concrete is a mixture of cement, sand, gravel and water. As the concrete drys and cures, it shrinks slightly. This shrinking can cause hairline cracks which do not jeopardize the structural integrity of the foundation. Large cracks or bulging in the concrete could indicate a more serious structural problem; for those, a professional must be consulted.

Other than cracks, look for efflorescence and other signs of moisture intrusion. Efflorescence is the white flakey salt residue left on concrete where moisture has intruded. A damp, or musty smell in a basement or crawl space may be another indication of unwanted water entering the space. 

Is it really serious to have a bit of moisture in the basement or crawl space? Maybe. Moisture can cause things like mould and dry rot to appear. Dry rot, despite its name. requires elevated moisture levels to occur. If your joists and beams are subjected to dry rot their structural integrity will eventually be compromised. The continual intrusion of water can also cause erosion of the concrete itself which obviously undermines the support structure of the house. So where a little moisture might not be a big deal, a lot of moisture usually is.

2. Insulation

Older homes in the Comox Valley, let's say pre-1950 may never have been insulated. This is something that will dramatically affect the cost to heat your home in the winter. Consider as well the energy efficiency of windows and doors, are they single pane? Is there weather stripping?

These items may not be deal breakers, but will definitely give you leverage when writing the deal.

3. Asbestos

Sometimes it would be preferable to buy a house that hasn't been insulated at all versus one that has been filled with asbestos insulation. The manufacture of products containing asbestos was banned in Canada in 1979, however, products made prior to that time may have been installed in homes up to 1990.

Asbestos can be found in a multitude of building products which appear in older homes, removal of these items should be handled by a professional and may be a costly endeavour. Here is a list of potential offenders:

• tiles
• siding
• roofing
• drywall
• spackling
• insulation
• fireproofing materials

4. Mould

We know that the Comox Valley is part of a temperate rain forest, so mould is difficult to keep at bay. Look carefully in the bathrooms, kitchen and basement for signs of mould. Fresh paint in some cases may be masking an area which was mouldy, look closely for paint colour mismatches to suss these out.

Is it a deal breaker? Maybe. If you are sensitive to mould as are people with allergies and asthma then yes... definitely steer clear. Also, the elderly, children and people with compromised immune systems should not purchase a home that shows any signs of mould. However, if you are healthy and willing to undertake the renovation, repairing the mould affect area may be a great way to add value to the home.

5. Wiring

Outdated wiring can be an issue when looking at older homes in the valley. Some instances of knob-and-tube wiring still exist and will need to be replaced with modern wiring. During the 1960s and 70s, due to an increase in the price of copper, aluminium wiring became popular in home building. No longer to code, aluminium wiring can heat up due to oxidation, it can cause lights to flicker and may produce odours in the areas of receptacles. Do not attempt to replace aluminium wiring yourself, a certified electrician must be used.

6. Pests

When inspecting a home you are thinking about buying, make sure to keep an eye out for signs of pests. Termites, ants, wasps, mice, rats, and even squirrels can create problems in your home. Look for rodent traps in the basement, ant traps, faecal droppings, etc. Remember to check the attic for signs of mice and squirrels and birds. Deal breaker? Probably not, but you will want to write the purchase contract to reflect the investment it will take to remove the pests.

7. Plumbing

From the 1970s to the 1990s Poly-B pipe was often used as a cheap alternative to copper tubing. At the time it seemed fine, but as time went on issues of deterioration have arisen with this type of pipe. The life expectancy of Poly-B is now known to be 10-15 years so if this is in the home you are looking to purchase, you should plan a major plumbing overhaul. 

Closely look at whatever pipework is accessible for signs of corrosion or deterioration. Old iron sewer pipes last a long time but may eventually need to be replaced.

8. Septic Systems and Wells

Many rural homes in the Comox Valley do not have access to city water and sewer services. In these cases, water may be brought to the home via a creek, a drilled well, or a shallow/dug well. Of these options a drilled well is preferred as it requires the least maintenance and usually provides a reliable water source year round.

Shallow wells and creeks as water sources may be ephemeral and not provide a sufficient source of water year round. In these cases, you may need to keep cisterns of water on the property to make up the deficit in dry weather.

And then where does the water you use go? In the city, sewer systems take it away but in rural areas, people have to deal with their own wastewater. Septic systems do just that, the water which goes down the drain and through the toilet enters a tank in the ground. Sometimes that is the entirety of the system and the tank needs to be pumped out regularly.

A septic tank with dispersal field is usually a better system as the liquid passes through the tank and is filtered through the soil. The solids which enter the tank sink to the bottom and are consumed by bacteria. Typically the bacteria cannot keep up with the amount of solids in the tank so the tank does occasionally need to get pumped out. The frequency of pump out is determined by the number of people using the system and the size of the tank. A household of four people using a 5000 litre tank would have to pump it out approximately every 3.4 years (source: inspectapedia.com). If you don't pump it out, the solids overflow the tank and get into the liquid dispersal field and will cause system failure and groundwater contamination. If you smell a funky smell around a dispersal field, this may already be happening.

9. Structural Issues

Sloping floors, sagging ceilings and bowed walls are often signs of significant structural issues in a house. Take a marble with you when looking at houses, set it down and you will quickly learn how level the floor is. Houses can settle after being constructed. Whether the sloping is a major problem or not should be determined by a structural engineer.

Look for cracks in the plaster around windows and door frames. These can be signs of a house shifting and potential structural problems. A little settling is normal but if in doubt have a professional take a closer look.

10. The Roof

To cap off the list of the top 10 things to look out for when buying a house we have the roof. One indicator that might indicate roof damage are watermarks on the ceiling. To take a good look at the roof you may have to get up on a ladder. Determine what type of roofing material was used on the roof and estimate at what point in its life cycle that material is at.

Here are some common roofing materials with their average lifespans (source):

• Composite Asphalt Shingles 15-40 years depending on the quality
• Wooden Shakes 35-40 years
• Standing-seam Metal Roof 30-50 years plus
• Clay or cement roof tiles about 100 years if maintained
• Slate 100 plus years

If the roofing material looks like it has seen better days you may want to get a quote from a roofing company and use that number when negotiating the final sale price of the house.

The good news is that most of these problems can be fixed, the bad news is that they may all cost you more than you were wanting to spend. Take the time to do a solid inspection with a reputable inspector it will be well worth the effort.

Moving is stressful and moving with children is even more stressful. There are more questions than answers when considering a move to a new town, making it difficult to answer questions that your kids may ask. The information below should help you answer these questions with confidence. 

What school will I go to? Will I make friends? I don’t want to leave my friends? What is there to do?

Let’s start with the basics. 

What school will I go to?

There are 21 public schools, 2 alternative programs and 3 private schools. Most of the public schools are smaller elementary schools which eventually merge into 5 high schools. Children regularly walk to and from school with their friends and parents. If your home is not within walking distance, then the school bus will pick up and drop off your little people.

The Comox Valley School Locator Tool will show you which school you would be attending depending on your street address. 

Of the 3 private schools Comox Valley Waldorf School,  Phil and Jennie Gaglardi Academy, and Beachcombers Academy, only PJGaglardi Academy goes to grade 12. The other 2 go up to grade 7 and 8 respectively. Each has its own unique curriculum. If private is your preferred route, you will definitely want to check them all out.

After graduation, North Island College welcomes students who are looking for a degree, diploma, university transfer, apprentice programs, fine arts, nursing and so much more.  There is everything from aircraft structures technician to web and mobile design developer programs. One of my personal favourites is the metal jewellery design certificate. There are 1000’s of bursaries and scholarships, including one sponsored by my office, Remax Ocean Pacific Realty. Lots of companies participate in local annual bursary programs.

What is there to do? 

There are competitive and recreational dance, theatre, choir groups galore. Sports of every kind and competitiveness. Plus, the Comox Valley is home to Mt. Washington Ski Resort and a world-class mountain biking area in Cumberland. 

These are a sampling of the activities available for adult, youth and children, the Comox Valley offers something for absolutely everyone.

Dance:

Vireo School of Performing Arts

Pantuso Dance

Triple Heat Dance

Voice:

Comox Valley Children's Choir

Theatre:

Theatre Works

Rainbow Youth Theatre

Courtenay Little Theatre

Sports:

If being part of a sports team is your thing, the Comox Valley is the perfect location.

Baseball: Comox Valley Baseball Association

BMX: Coal Hills BMX

Climbing: Cumberland Recreation Climbing Wall

Field Lacrosse: North Island Field Lacrosse

Football: Comox Valley Youth Football

Gymnastics: Chimo Gymnastics Club

Hockey: Comox Valley Minor Hockey

Lacrosse: Comox Valley Minor Lacrosse

Mountain Biking: United Riders of Cumberland

Roller Derby: Brick House Betties

Rugby: Comox Valley Kickers Rugby Club

Sailing: Comox Bay Sailing Club

Skating: Comox Valley Skating Club

Skiing: Strathcona Nordic Ski Club

           Mt. Washington Ski Club

Soccer: Comox Valley United Soccer

Swimming: Comox Valley Aquatic Club

What I found when moving to the Comox Valley is the cost of activities are more reasonably priced than in the big city. With so many fun activities, it will take little time for your children to find new friends to create amazing bonds that will last a lifetime. The Comox Valley is a social area where indoor and outdoor activities are endless.

The Comox Valley is often considered an amenity destination. It has everything a person wants and needs. You can find a family doctor, dentist, veterinarian and specialists. The hospital and college are both new. Comox airport has many daily flights and Calgary becomes a great hub for travelling internationally when flying from Comox. Having the airport next to the CFB Comox Airforce Base, flights take off and land in Comox when other parts of Vancouver Island are fogged in. 

If you want to live in a community that brings your family closer together, consider the Comox Valley.

Does moving make you nervous?

Does looking a home make you nauseous?

I get it – moving costs a lot. Will your friends still visit? What about the kids? Will it be worth the hassle?

The question you need to ask yourself is why did you start looking to move in the first place? Was it for more space or are you looking to downsize?

Do you need more from your home than the current one allows? Are you thinking of renovating and wondering if it would be better to move instead?

All of these are great questions that only you can answer. 

Here is my question to you,  

If you put off buying a home today will you be at peace with your decision or will it nag you and weigh heavily on your shoulders.

If you can let it go, then maybe the timing isn't right.

However, if you can't drop it then you know it is time.

With the desire to be as energy efficient as possible to save money and create a smaller footprint on the earth, our budget and our values can sometimes be at odds while house shopping. Luckily there is a solution for when you find your dream home but it is not as energy efficient as you had hoped. With a combination of lender financing options called Purchase Plus Improvements and BC Energy and Efficiency Grants you may be in for a win-win situation. 

Purchase Plus Improvements is a program where you can add a certain dollar value of money to your mortgage. Suppose you purchased a $450,000 property and you wanted to do some upgrades. You could add up to 10% of the value to the property price for renovations. Now you will have a purchase price of $495,000 and would need at least 5% down payment on $495,000 versus $450,000 BUT you would have that extra money to do renovations and improvements on your home.

To get even more bang for your buck, utilize some of those funds to create a more energy efficient house, including new windows, upgraded insulation, changing to an efficient heat and hot water source you may receive rebates from utility companies, government and even the high ratio insurance providers. https://efficiencybc.ca/incentives/ is a great place to start to see what rebates and incentives you could be eligible for.

I have personally utilized these incentives to make a 1913 home more comfortable and affordable to live in. If the house you love isn’t perfect, there are a lot of options to make it work for you. Call me if you would like further insight into the available programs.