Turning the key in a lock that no landlord has access to, reading in a hammock in your own backyard and painting your dining room bright red - what could be more exciting than making the leap from renter to first-time homeowner? Getting swept up in all the excitement is a wonderful feeling, but some first-time homeowners lose their heads and make mistakes that can jeopardize everything they've worked so hard to earn.

1.        Don't overspend on furniture or remodeling

2.        Don't ignore important maintenance items

3.        Hire qualified contractors

4.        Get help with your tax return

5.        Get properly insured

Read article here

I came across a great video and article on Victoria Realtor Aaron Hall's website covering the importance of building inspections.  

Building inspections are a typical part of most real estate transactions in BC. There are many good reasons for a building inspection, for me the most important discoveries in a building inspection relate to issues that can prevent the Buyer from obtaining insurance for the property. The importance of property insurance lies in Financing. Lenders do not Finance properties which cannot be insured. Basically, if the property does not qualify for insurance it also does not qualify for a mortgage. When we see a house that is priced drastically lower than other comparable homes it is often due to an issue with insurance. In these cases the only potential buyer for this house is someone who can buy it without a mortgage.

Visit Aaron's blog to see a video on this topic.

It has always made sense to run your home as efficiently as possible, energy wise. But the stakes are higher these days. Gas and electricity prices are on the rise. Will they go higher? Oh, you bet!

Buying energy efficient appliances, sealing up your windows and doors, getting better windows and doors, insulating your roof and basement, upgrading your furnace, turning down your water heater, getting a tankless water heater: all these household changes mean dollar savings every month when you get your energy bills.

These savings add up fast. Replace five of your most commonly used light fixtures or bulbs with Energy Star rated versions and save $70 a year. A new Energy Star window will save you $20 to $95 dollars a year in wasted heat and cooling. Install a programmable thermostat (and program it to work around when you work and sleep) and save as much as $180 a year. Switching to Energy Star appliances will save you between $300 and $600 a year (the fridge is the big one: you save $100 or more a year by replacing an old one and even more if you chuck the basement beer fridge).

For more specifics on what you would save, check out Natural Resources Canada’s Energy Star calculator.

But turning your home into an energy smart zone has benefits beyond saving on gas and electricity. Here are a few benefits you might not have considered:

Your mortgage

Energy efficient mortgages (EEMs) give you financial incentives to either buy an energy efficient home, or upgrade your existing or newly bought home to make it greener.

The Canadian Mortgage and Housing Corporation (CMHC) has a great plan for first time homebuyers. CMHC is most famous for offering mortgage insurance for people with too-small down payments for their first home. Under the organization’s green mortgage program, you can get a 10 per cent refund on your mortgage insurance if you buy a green home or make energy efficient renovations. You can also extend your amortization up to 30 years under the program (why you’d want to do that we don’t know, longer amortizations cost you money in the long run!).

Meanwhile, private lenders have programs too. TD Canada Trust runs a green mortgage that offers you 1 per cent off the posted rate of a five year fixed mortgage, gives you up to 1 per cent cash back on your mortgage and donates $100 to the TD Friends of the Environment Foundation when you buy Energy Star products for your home or install solar panels.

Resale value

Kitting up your house with green changes big and small will one day impact your home’s attractiveness on the market. (Case in point: a recent build in my neighbourhood went for a startling price because the house was going to cost just $500 a year to heat.) Buyers are keen to walk into a house that’s been fully insulated has the most energy efficient appliances installed and has an appealing energy bill to back it up. There’s a growing trend among real estate agents themselves to think green and these types of professionals will be drawn to buying or selling your home.

Rebates

If you do it right, you can get hundreds or even thousands of dollars back from your eco-friendly home changes. The biggest deal in rebates right now is the newly relaunched federal EcoEnergy Retrofit Program. It requires a home audit but gives you as much as $5,000 back for making home improvements such as insulation and new windows or furnace. It runs just until next March, and you need to make the upgrades before that time to get the money back.

As well, most provinces have a wide range of rebate programs for doing things like taking away old fridges, giving you money back for new Energy Star appliances, offering rebates on windows and giving you money for switching to a tankless water heater. Natural Resources Canada has a pretty up-to-date list on the current programs available, but look to your province’s office of energy efficiency and hydro corporation for more information to be sure you catch all the deals.

When you spruce up your home to not just look good but run more efficiently, you can save a lot of money. Some of it right away, more over time. And it’s also just simply the right thing to do if you can afford it.

source: ratesupermarket.ca

The B.C. and federal governments have announced plans to invest $180 million in affordable housing throughout the province.

Heralded this morning at the opening ceremony of the Sorella housing project in downtown Vancouver, the partnership will see Ottawa and Victoria contribute $90 million each towards new housing developments over the next three years.

Though the funds have not yet been earmarked for specific projects, according to a spokesperson from BC Housing, developments funded under the plan "will be modest in terms of size and amenities and will remain affordable for ten years or a mutually agreed upon period of time."

Read entire article

A relatively strong Canadian economy will force the Bank of Canada to double its key lending rate by the end of the first quarter in 2012, says a new report from Citigroup Capital Markets.

The country’s central bank will stand pat when it announces its latest rate decision on Tuesday but come October it will begin a tightening campaign that will see rates jump 100 basis points in about six months, said Todd Elmer, a foreign exchange analyst at Citi.

Mr. Elmer said the Street’s presently downbeat rate expectations stem mostly from external factors – presumably the European sovereign crisis and waning U.S. recovery – and poorly reflect Canadian data that has consistently exceeded expectations.

“This means that there is still some time before the BoC may need to explicitly signal a hike, but with limited spare capacity in the economy, we doubt there is sufficient breathing room for the Bank to adopt a more dovish stance.”

Some worry that a rate hike in Canada at a time when U.S. monetary policy is turning more dovish could drive the loonie higher to the detriment of growth.

But Mr. Elmer said the market has tended to overestimate the drag from the currency on both the real economy and price.

Despite persistent Canadian dollar strength, he noted that Citi’s economic surprise index for Canada has moved sharply higher recently as has the bank’s inflation surprise index.

“This skews risks in favor of a more hawkish statement from the BoC and Monetary Policy Review this week and a potential rise in interest rate expectations,” he said.

When you hear the phrase “the oldest continuing branch of the legal profession worldwide” you most would undoubtedly believe that this phrase is referring to the practice of law as a lawyer, but believe it or not this title belongs to the profession of Notaries. Our tradition dates back to the ancient roman times where Notaries, then also referred to as scribes, were responsible for recording important events such as judicial proceedings and the transcribing and copying of important documents. Today Notaries are still found around the world, but British Columbia Notaries have a unique history and an even more unique role in today’s modern legal world.

The journey of British Columbia Notaries can be recorded back to 1792 when Captain George Vancouver took voyage from Europe to discover the lands we now call British Columbia. To record his voyage he brought with him a trusted record keeper and scribe, a Notary. The Notaries notes were deemed trustworthy and reliable and were used to record his every discovery and accomplishment along their journey into this new world. Moving forward in time to 1823 when BC’s first Notary was sworn in by another famous historical figure, Sir James Douglas. Our Provinces early Notaries provided the services of guarantees when land was purchased, drew mortgage agreements and acted as witness to many important documents of that time.

Moving forward again to the Gold rush of 1858 seals were issued allowing Notaries to practice in the now booming gold rush towns and provide services to the local settlers, such as documenting claims of property rights and providing witness to documents that required it. In 1867 the Law of Ordinance allowed Non-lawyer Notaries to practice in the province of BC and in 1871 the provincial legislature passed the Notaries Public Appointment Act seemingly securing the future of this historical legal profession in the province of BC. However, struggles ensued when competition became tight amongst lawyers and Notaries in BC during the First World War which led to the creation of the Notaries Act of 1924 providing Notaries who had been commissioned by the courts a life time appointment. To further secure their place in the legal world Notaries in 1926, led by Notary Lack Loutet, organized and incorporated themselves under the Societies Act now making themselves a self governing organization.

The struggles, however, began again when several applicants applying to the court to be appointed Notaries for BC experienced great difficulty, at this time it was argued that there were enough lawyers to service the needs of the public and notaries were no longer needed in many areas. This inability to replace members that had retired or given up their appointment had left the society fearful it would yet again face extinction. In 1981 a great showing of public support resulted in the passage of the current Notaries Act which provided a set number of seals or positions, just over 300, available for Notaries from the BC Notaries Society to fill; progress indeed, but still a limit. 

In January of 2010, however, after the creation of a new education requirement of a Masters Degree in Applied legal studies, another significant change to the legislation occurred and the “seals were lifted” allowing the BC Notaries Society to Commission as many Notaries as they could educate through their new program. A hurdle of mass proportion had finally been overcome and Notaries today are now allowed to service the communities they live in with no geographical restrictions.

Although many duties of Notaries Public have changed over the centuries the core values remain the same, the value of trust, integrity, commitment to the community, passion for the profession and a keen vision for the future.

**Special thanks to the brilliant knowledge and writings and Dr. Hoeter one of BC’s most influential Notaries. His articles on the History of the BC Notaries and of the Notaries of Roman times may be found on –line through the BC Notaries Magazine “The Scrivener”

In today’s competitive housing market, where you may be competing against multiple buyers in a bidding war, you may be tempted or even encouraged to write a “clean” offer to purchase, without including any conditions. This is a binding sales contract once the sellers accept your offer. The most common conditions placed in offers allow buyers time to obtain their financing commitment from their mortgage lender, and may also include a satisfactory home inspection.

The clauses often read “This offer to purchase is conditional upon the buyer obtaining satisfactory mortgage financing by (date) and (time)... failing of which this offer will become null and void and the buyers deposit will be returned in full, etc.”

Once all conditions are met, your Realtor will have you sign a waiver form, as the conditions must be removed within the time period allotted for the sale to become firm.

But what are the risks of writing an offer to purchase without a financing clause? Many.

Let’s say you have a team of professionals who have worked with you to get you as ready as you can be to make that offer to purchase. Your team should consist of an Accredited Mortgage Professional and an experienced Realtor – a Realtor who knows how to present your offer to purchase in the best light and sell the vendors on why they should accept your offer. Your Accredited Mortgage Professional will have pre-approved you to purchase, pulled a credit bureau, provided you with parameters for affordability, assembled your income and down payment verification and provided you with a mortgage pre-approval subject only to CMHC or a satisfactory appraisal of the property. You may be tempted to write an unconditional offer to purchase because your Mortgage Professional has indicated that you look strong and you have passed the test on affordability and credit, right?

But your mortgage financing approval is not based on you alone. The lender and the insurer (CMHC, Genworth Financial or AIG) also need to pass their approval on the property too. The property is the physical collateral for the loan, and your covenant (personal strength credit wise and ability to repay the loan) and the property itself both become part of the approval process. In high ratio mortgage approvals, the insurer (CMHC, AIG or Genworth) have the final say. In conventional properties, the approval will be subject to an appraisal to confirm value.

Here’s what could go wrong:

For example, let’s say you have 5% down payment, plus your closing costs. It is a bidding war, so you come in with your strongest offer, and bid well over the asking price. It is within the price range that your Accredited Mortgage Professional has advised you on the affordability test. The deal is submitted by the lender to CMHC for their approval. CMHC compares the property value against recent and comparable sales in the area, and determines that they will not support the value you offered. They may request a full appraisal of the property. If, for example, you bid $240,000 on the property and CMHC assesses the maximum value of $230,000, they will only allow a maximum mortgage of 95% of $230,000. You would be responsible for the shortfall in the down payment. If the offer to purchase was not subject to financing, and you could not cover the shortfall in the extra down payment, you could be subject to losing your deposit and risk being sued for damages. In reality, you have paid too much for this property and because the offer to purchase was unconditional, the contract would be binding.

Another scenario is that CMHC requests a full appraisal on the property. The appraiser comes back with a report that there is a foundation problem, and they are not willing to insure at all. Or in conventional financing, the value may again effect the purchasers in the amount the purchasers have to provide as down payment.

My recommendation is that if you are requiring mortgage financing, you should always put in a financing condition - for your own protection. If you've written an offer subject to financing and CMHC doesn’t approve the property, you'll be disappointed, but protected. If you've written an offer unconditional and you don't get your mortgage financing, you'll lose your deposit and risk being sued for damages.

I will do a thorough job of getting you as ready as I can for your purchase. All your documentation will be on file before you write your offer, so the financing condition can be completed in just a few days. If you have an experienced Realtor to negotiate with the vendors, writing a financing condition should not prohibit you from getting the home of your dreams. There are many Realtors who are very successful at winning bidding wars that always include a financing condition.

Things are definitely looking up for the Canadian economy, but don’t bank on interest rates rising anytime soon.

With Europe’s credit mess spilling over and the faltering U.S. recovery eliciting serious talk about QE3, it’s pretty much unanimous the Bank of Canada will stand pat when setting its policy direction next Tuesday and may not budge until later this year or next year.

“The arguments are there for the Bank of Canada to start hiking rates next week, but we increasingly think that this fall might even be too early given the problems we are seeing in the global economy,” said Jimmie Jean, an economic strategist at Desjardins Capital Markets based in Montreal.

Despite encouraging news over the past week, including solid housing and jobs numbers and improving business sentiment that suggest Canada is bucking the global slowdown, not one of 37 economists and strategists recently surveyed by Reuters expects the Bank of Canada to hike rates July 19.

While some do expect a 25-basis-point increase in September, the median forecast predicts the central bank will leave its key policy rate at 1% until the fourth quarter.

Mr. Jean has pushed his rate-hike expectations out to December. In his mind, as positive as Canadian economic data have been lately, there is no urgency for the Bank of Canada to tighten policy when both Europe and the United States, the world’s two biggest markets, are struggling.

If Europe’s sovereign crisis results in a country defaulting on its debt or escalates in some other manner, it could shock the global financial system by straining funding markets for banks — Canadian ones included — to create another liquidity crunch, he said.

Meanwhile, prospects of the U.S. economy regaining its footing in the second half of the year seem to be diminishing, especially following last week’s dismal jobs report and now U.S. Federal Reserve chairman Ben Bernanke has raised the possibility of another round of quantitative easing.

“That was pretty firmly ruled out just a few weeks ago and now the possibility is being raised,” Mr. Jean said. “There’s no question that if the Fed goes QE3, the Bank of Canada is not going to hike rates.”

Karen Cordes Woods, a financial markets economist at Scotia Capital Markets said the risks of tightening monetary conditions currently outweigh the benefits and she doesn’t think the Bank of Canada will move on rates until the second quarter of 2012.

She said material tightening is being imposed on the economy from fiscal retrenchment and the strength of the Canadian dollar to stricter mortgage lending guidelines and elevated commodity prices that continue to crowd real wage growth despite the improvements in the labour market.

Although there is recent evidence of inflation creeping into the economy, it’s not nearly enough to justify a rate hike and Ms. Cordes Woods believes a move to tighten by the Bank of Canada would only put more upward pressure on the dollar and represent an unwanted headwind for the economy.

“The Bank of Canada still has time to stay on the sidelines,” she said. “They will do what they see fit given the conditions.”

Today, almost every single transaction is title insured whether it is a routine condominium transaction or a complicated commercial transaction.

Before title insurance, lawyers had to do all there on title searches at the land registry offices and their off-title searches to various government compliance authorities such as zoning, building, environmental, fire, utilities, tax, etc. All these searches are costly and could take weeks to obtain. Title insurance replaces off-title searches by compensating the Purchaser if there are any undisclosed off title issues. Moreover, title insurance will compensate the Purchaser for any on title issues not disclosed by a land titles parcel abstract available electronically through the land registry offices.

With title insurance, a lawyer does not need to give an opinion on title, meaning that he or she is not guaranteeing title. Title insurance can also cover or insure over known title defects in order to help facilitate the transaction should the defect threaten to cloud title. Moreover, title insurance can be obtained in lieu of a survey. Most Seller’s do not have up-to-date surveys, therefore if there are encroachment issues that the Buyer was not aware of due to the unavailability of an up-to-date survey, the title insurer will compensate the Buyer.

Title insurance also protects against real estate and mortgage fraud which can occur with the use of fake identification when fraudsters purport to be the home owners, dupe lawyers, and proceed to sell or mortgage the property without the real owner’s knowledge.

While title insurance is at the option of the purchaser, it is a great product that protects the title holder and typically the lender for as long as the property owner owns the property without having to pay any fees except a one time fee on closing. There are different title insurance policies and title insurance companies. On your next transaction, speak to your lawyer about the different available policies and the pro’s and cons of obtaining title insurance.