GENERAL DISCUSSION
Other

H.S.T. will apply to realtors’ services for work done after July 1, 2010. The full 12% H.S.T. will apply on listings that start after July 1, 2010.

The confusing part arises when work is done on listings that commence prior to July 1, 2010, and the house sells after July 1, 2010.

For situations like this, the realtor must determine what percentage of the work was performed prior to July 1, 2010 and what percentage is performed after. Generally there are two ways to measure the work that was performed. A realtor can use the number of days after July 1 as compared to the number of days prior to July 1. Alternatively, the realtor could use the actual work performed. There is nothing expressly in the transitional rules on this but we have checked with Revenue Canada on their helpline on H.S.T. (1 800 959 8287). It was confirmed to one of my lawyers that the realtor, in calculating the percentages, would have the discretion to choose either the number of days listed or actual amount of work done, as long as it was a reasonable determination.

If the realtor determines that 90% or more of the services are performed before July 1, 2010, the H.S.T. will not apply. G.S.T. will continue to be charged at 5%.

For example, a listing commences June 1, 2010 and the realtor performs the initial work in taking the listing, placing it on MLS and all of the other functions. A Contract of Purchase and Sale is negotiated and subjects are removed prior to July 1, 2010. The Completion Date is July 2, 2010 at which point the commission becomes due and payable. Using either method of calculation more than 90% of the realtor’s services were performed prior to July 1, 2010. Thus only the 5% GST would apply on the commission.

If the realtor determines that less than 90% of the services were performed prior to July 1, 2010, the services and the resultant tax on the commission will have to be prorated as per the work that was performed. Let’s use two examples.

There are two different listings with the same realtor. The vendors are different but both are listed June 1, 2010 on MLS.

On the first listing, an offer comes in quickly and there is an accepted offer by approximately June 10. The Vendor is unable to vacate for a considerable period of time and therefore the Completion Date is September 1, 2010. In this example, the realtor would choose the actual amount of work done option which would be reasonable as most of the work would have been done in June prior to July 1, 2010. Therefore most of the commission would be subject to GST only.

For the second listing, a Contract of Purchase and Sale has its subjects removed on July 2, 2010 but the Completion Date is July 10, 2010. In this example, the realtor would in all likelihood choose the actual number of days listed option so that only about 25% of the commission would be subject to H.S.T.

Note that in any issue with taxes Revenue Canada may argue that more taxes ought to have been charged. Realtors should ensure proper notes and documentation is kept so that they can support their position of the percentage that was charged.

USA Today

ST. PETERSBURG, Fla. (AP) — The federal government is relaxing some rules to make it easier for communities to spend money on redeveloping abandoned and foreclosed properties.

The changes, effective immediately, will allow cities, counties and states to buy properties in mortgage default and uninhabitable homes with lingering code violations through the $4 billion Neighborhood Stabilization Program.

The program was started in the midst of the nation’s foreclosure crisis, but a year later about a third of more than 300 local governments that got grants have barely made a dent in them, according to a recent report from the U.S. Department of Housing and Urban Development.

Some city, state and county officials say they have had trouble spending the grant money because federal rules are confusing and cash investors have often outbid them for residential properties.

“It became clear to us that the Neighborhood Stabilization Program as originally designed was too restrictive and limited the ability of our local partners to put this funding to work quickly, Mercedes Marquez, HUD’s assistant secretary for community planning and development, said in a statement. “We need to be more flexible so our local partners can respond to market conditions and reverse the effects of foreclosure in these neighborhoods as quickly as possible.”

James Miller, spokesman for the Florida Department of Community Affairs, which got $91 million to distribute to 24 cities and counties, called Friday’s announcement wonderful news.

“It just broadens the pool of available properties that local governments can target,” he said. “This opens up more possibilities for them.”

Buying a foreclosed home can be complicated, and the new rules will make it easier for communities by giving them a broader pool to work from.

Now a community can buy a property that is at least 60 days delinquent on its mortgage if the owner has been notified, or if the property owner is 90 days or more delinquent on tax payments.

HUD also expanded the definition of an abandoned property to include homes where no mortgage or tax payments have been made for at least 90 days or a code enforcement inspection has determined that the property is not habitable and the owner has taken no corrective action.

Copyright 2010 The Associated Press. All rights reserved

Sun

A range of forces affect conditions and behaviour within a housing market, such as economic activity, legislative changes, technological innovation and evolving social awareness, as seen in the affordable housing or green/sustainable building movements.

The Real Estate Board of Greater Vancouver (REBGV), the professional association for nearly 10,000 realtors, conducts research annually to help its members gain a greater understanding of these emerging trends and to heighten awareness of changing public expectations of realtors.

In 2009, the REBGV commissioned Skunkworks Creative Group Inc. to conduct its latest body of research, Understanding Expectations, in partnership with the BC Real Estate Association and the Fraser Valley Real Estate Board. The research takes a close look at what consumers expect from their realtors, and what gaps may exist between client and realtor expectations.

The study found that, with improved technology and the increased availability of information, homebuyer expectations of their realtors are shifting away from traditional norms.

Today’s homebuyers use the internet to familiarize themselves with the market and begin a property search. They don’t expect their realtors to be an exclusive source of property information. While the property search is still an important role they expect from realtors, homebuyers say it’s even more important to work with a realtor who will guide them through the intricacies of making an offer and negotiating an acceptable purchase price on their behalf.

In contrast, according to the research, the majority of realtors believe their most important function to a buyer is providing property information.

This difference presents an opportunity for greater symmetry in the realtor-client relationship.

The study also found that realtors may underestimate the importance sellers place on the realtor’s role in establishing proper pricing levels for their home. Consumers reported they are twice as likely to rely on their realtors as the most trustworthy source of information rather than themselves.

Last year, the REBGV and the Fraser Valley Real Estate Board also commissioned the Mustel Group to conduct the 2008 Home Buyers and Sellers Survey, which questioned 1,100 residential homebuyers in the Lower Mainland.

The survey revealed that, of all newly built homes purchased through the Multiple Listing Service (MLS) in 2008, 53 per cent of the transactions in Greater Vancouver and 65 per cent in the Fraser Valley were purchased as a pre-sale, meaning before the home was built.

The study also looked at buyer and seller satisfaction with the final sale-price. The majority said they paid about what they expected, with 31 percent in Greater Vancouver and 23 per cent in Fraser Valley saying they paid more than they anticipated.

Home sellers generally agreed that their home sold for what they expected or more in the last year, with 77 per cent of home sellers in the Fraser Valley and 69 per cent in Greater Vancouver expressing satisfaction with the sale price.

Research is also conducted to determine whether the professional and regulatory framework in real estate protects and satisfies the home buying and selling public.

In each of the past five years, the REBGV has commissioned Ipsos Reid to conduct polling of the public (groups who have and have not used a realtor). The survey consists of five statements about realtors, and respondents are asked to indicate whether they agree, disagree or hold a neutral viewpoint.

The results show that the public generally holds a positive view of the real estate profession. About 75 per cent of respondents typically say they view realtors as knowledgeable professionals. Seventy per cent indicate that realtors adhere to a high standard of professional conduct and enjoy a positive public image, and just under 70 per cent say realtors are highly skilled professional service providers.

The same survey results indicate that 58 per cent of public respondents believe a legislative framework exists that supports consumers in the buying and selling of real estate.

Research is critical for understanding how buying habits can change the type of homes built in our communities. For example, 2003 marked the first time that the number of annual condominiums sales in Greater Vancouver outpaced sales of single-family detached homes.

Today, nearly 60 per cent of homes purchased in the region each year are either condominium or townhome properties.

Through these polls, surveys and studies, realtors aim to ensure their efforts align with the needs of their clients.

© Copyright (c) The Vancouver Sun

Sun

Before embarking on a home buying or selling journey, be sure to educate yourself about all of the information and services available to you. Here’s a rundown of some of the key real estate websites:

www.realtor.ca

Formerly mls.ca,this is the most popular real estate listing website in the country. In 2008 the Canadian Real Estate Association (CREA) re-branded and re-designed

www.mls.cato become

www.realtor.ca.This change brought interactive mapping and upgraded search functions and capabilities, making a more streamlined experience for people using the site.

www.realtylink.org

This is the online version of the newspaper publication seen in real estate office and grocery stores across the region. The Realtylink website is another great resource for consumers. The website contains a wide range of home listings for properties across the province and features in-depth walkthrough-style information. You can also use the site to find a REALTOR working in your community.

www.howrealtorshelp.ca

Built and maintained by the Canadian Real Estate Association, this site is filled with good information for those looking to buy and sell a home. As a bonus, there’s a game called “Adventures in Real Estate” that helps test your knowledge about buying and selling real estate.

www.rebgv.org

The Real Estate Board of Greater Vancouver’s (REBGV) website offers detailed MLS statistics, monthly podcasts, consumer guidance and other information and links related to local real estate.

You can also read about government initiatives that impact local real estate and the different cost-savings programs available to the public.

© Copyright (c) The Vancouver Sun

Derrick Penner
Sun

Metro Vancouver’s cheap-mortgage-fuelled real estate market has overshot its previous peak for prices with indications it will keep going, albeit more slowly, before cooling with the rise in interest rates.

February saw the average property price hit $662,741 in the area of Metro Vancouver within the Real Estate Board of Greater Vancouver. (The board does not cover Surrey, Langley or White Rock.)

That is well above the previous $624,639 peak price, which the region saw in May 2008.

Now, the Teranet-National Bank housing price index, a more complicated measure of property prices that analyses data from the repeat sales of homes, also indicates that all the deflation of home prices that occurred during the recession had been regained by January, and will keep going, but more slowly.

The Teranet-National Bank index, which runs a couple of months behind the reports of real estate boards, found January was the ninth month in a row that the national price index increased, though it did so by the smallest margin in the past nine months.

“Even in Vancouver, we’ve gained back everything we lost,” Simon Cote, an analyst at the National Bank of Canada said in an interview. “The pace might be slowing a bit, but they are still going up.”

Metro Vancouver prices, on the Teranet-National Bank index, reached their recession trough in May 2009, but rose 11.7 per cent between May and January.

Metro Vancouver prices rose .9 per cent between December and January, the biggest gain among the six major markets included in the Teranet-National Bank index.

National Bank analyst Marc Pinsonneault, in a note to clients, said the January price increases can still be considered “vigorous, especially in Vancouver and Toronto,” but that developments in most markets back up National Bank’s view that increases will slow down.

Pinsonneault said that after eight months of briskly rising prices, Metro Vancouver’s market has “shifted from a favourable-to-sellers market to a balanced market.”

Cote added the bank is “expecting that the increase in supply, both of new construction and more homes coming to the [resale] market, will bring the market back into equilibrium.”

Mortgage rates will also be a factor. Canada’s major banks raised their posted rates on five-year fixed mortgages .6 of a percentage point on Monday and Tuesday to 5.85 per cent, which will squeeze some buyers out of the market, according to Cameron Muir, chief economist for the B.C. Real Estate Board.

“What it means for purchasers is that it erodes their purchasing power” by reducing the size of mortgages buyers are capable of carrying, he said.

For a family with a household income of $70,000, Muir said, this week’s bump in five-year rates for buyers seeking five-year terms reduces the final amount they can pay for a home by $35,000.

The increase, he added, “is a fairly hefty lift.”

© Copyright (c) The Vancouver Sun