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Presented to the BC Select Standing Committee on Finance and Government Services by the Real Estate Board of Greater Vancouver’s Government Relations Committee on October 15, 2010.

The story they tell is the same. They’re potential home buyers, eager and even desperate to buy a home in Canada’s most expensive housing market. Coming out of one of the worst recessions, they’ve managed to hang onto jobs and through sheer effort and thrift, they’ve saved for their down payment, needing every cent.

Then comes the surprise and the shock when they realize they’re unprepared for the overwhelming taxes associated with the purchase of their property.

First it was the Property Transfer Tax ( PTT), which adds about $ 16,000 to the average price of a detached home in Greater Vancouver. Now, new home buyers must also pay a 12% Harmonized Sales Tax ( HST), which is 7% more than they used to pay with the Goods and Services Tax ( GST).

Fence sitters are candid: paying both the PTT and the HST is too much. In the Board area, fewer and fewer potential home buyers can afford to buy a small starter home even in an outlying area. Even modest condominiums are taking longer to sell. Wary buyers wait, hoping the HST will be eliminated following the referendum, while they calculate taxes in the Lower Mainland that are more than twice those of other areas across the province due to the higher home prices.

Over the life of a mortgage, the $ 96,939 in taxes ( see table opposite) that a Metro Vancouver home buyer pays will cost a total of $ 152,976, using a 4.00% mortgage rate and 25 year amortization, with monthly payments of $ 509.92.

How have home buyers in Greater Vancouver reacted to the HST so far?

In the two weeks leading up to the July 1, 2010 implementation of the HST, home buyers jumped off the fence and into the market. In contrast, home sales in the two weeks after July 1, 2010 dropped 16%. ( see chart opposite)

Although REALTORS ® continue to inform buyers that the HST applies to new homes only and that there is a rebate program, buyers incorrectly believe the HST applies to all properties, including resale properties according to an August 5, 2010 survey by Royal Lepage. The results of the misperceptions are clear. In the two months following HST implementation, MLS home sales fell further and we’re hearing that home buyers are holding off buying a home until after the referendum.

REALTORS ® are attuned to the hopes and worries of property buyers, sellers and owners. What they’re hearing is that the HST and PTT are hurting home buyers and everyone associated with the transaction, from home inspectors to landscapers to furniture sellers.

Home buyers can’t sustain this level of taxation, a situation which is creating uncertainty for potential buyers, investors and businesses – and undermining economic growth. All of this could delay the housing market recovery, hurt the fragile economic recovery and inhibit the province’s ability to grow and compete.

Further, renters may be concerned that building owners may not be able to cover upkeep expenses because they are unable to claim HST input tax credits for goods and services.

Those owning a condominium worry about future building envelope problems and rising maintenance and repair costs that increase strata fees.

Recommendations

Here are five recommendations to help propel us out of the home sales slow-down and put us back on track to generate more opportunities for home buying and the resulting economic spinoff benefits.

1. Increase the 1% PTT threshold to $ 525,000 from $ 200,000, and in expensive markets increase it to $ 700,000. For 2011, index this threshold to BC Assessment average sales prices and then for 2012 onwards, index the threshold to the Canadian Real Estate Association’s National Housing Price Index ( currently under development). Apply the 2% tax rate to the remainder of the sale price and index annually. The threshold hasn’t been raised since it was introduced in 1987 and has resulted in a much larger tax burden as a result. It’s a classic example of tax bracket creep.

2. Raise the HST New Housing Rebate threshold to $ 700,000 from $ 525,000 in expensive markets such as the Lower Mainland. The threshold should be indexed to BC Assessment average sales prices for 2011. For 2012 onwards, index the threshold to the Canadian Real Estate Association’s National Housing Price Index ( currently under development). This would result in a fairer distribution of these taxes province-wide.

3. Allow Input Tax Credits for owners of residential rental accommodations. Owners of rental apartment buildings cannot claim HST input tax credits for goods and services to provide the rental service. While the HST adds 1.5 – 3% to

1 operating expenses, owners can’t raise rents more than 2.3%. This disincentive

2 discourages rental investment. We support the provincial government lobbying the federal government to allow zerorating of rental housing so that rental landlords can claim input tax credits on HST paid on operating expenses.

4. Reinstate the provincial portion of the HST Rebate or Tax Credit for leaky condominium repairs. This will help owners with repair costs, protect future owners and ensure that building envelope repairs are completed to accepted standards.

5. Extend the provincial portion of the HST Rebate or Tax Credit on energy efficient products.

In order to help home owners make their properties more energy efficient, there needs to be an exemption for the provincial portion of the HST on energy efficient products. This could be a point of sale rebate or a tax credit similar to the federal Home Renovation Tax Credit.

( Note: Subsequent to this presentation being made, the provincial government reinstated the Live Smart BC program – see www. livesmartbc. ca) 1 British Columbia Apartment Owners and Managers Association 2 Ministry of Housing and Social Development, www. rto. gov. bc. ca/ content/ news/ default. aspx

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Last month the federal government announced three changes to the rules for government-backed insured mortgages.

First, the government will reduce the maximum mortgage amortization period to 30 years from 35 years. Second, the maximum amount of the value of a home that can be re-financed will drop to 85 per cent from 90 per cent. And finally, government insurance will no longer be available to financial institutions wishing to insure home equity lines of credit.

“ These are prudent measures that promote responsible lending practices and further strengthen our internationally recognized mortgage finance system,” Jake Moldowan, Real Estate Board of Greater Vancouver president said.

Key dates

Changes to the maximum amortization period and the maximum refinancing amount come into force on March 18, 2011. The withdrawal of government insurance backing on lines of credit secured by homes comes into force on

April 18, 2011.

Exceptions to dates

When the rules come into force, exceptions will be allowed where they are needed to satisfy a binding purchase and sale, or a financing or refinancing agreement entered into before the corresponding enforcement dates.

Here’s some additional information about the three changes announced by the federal government.

1. Reducing the amortization period to 30 years from 35 years. How much will the new rules cost home buyers? For home buyers, a shorter amortization period means higher weekly or monthly mortgage payments, but lower overall interest payments over the life of the loan. It should be mentioned that home buyers can still buy a home with a five per cent down payment.

2. Lowering the maximum refinancing amount to 85 per cent of the loan to value ratio. • Home price: $ 300,000. • Refinancing at 85 per cent: a home

owner can access up to $ 255,000.

• Refinancing at 90 per cent: a home

owner can access up to $ 270,000. • Total savings in home equity: $ 15,000.

3. No government insurance backing to financial institutions insuring home equity loans. To mitigate risk to the Canada Mortgage and Housing Corporation, lenders now offering multiple loans or a multi-segment loans secured against a borrower’s home, will no longer be eligible for government-backed insurance. However, loans with established scheduled principal and interest payments will continue to be eligible for governmentbacked insurance.

With all of these changes coming in the next few months, the public are encouraged to consult with their Realtor, mortgage brokers or mortgage providers to get a sense of what these changes mean to them. These changes are expected to have a small but important impact on the average home buyer’s budget, and should be taken into account when planning a home purchase.

For information, visit the Federal Department of Finance at www. fin. gc. ca.

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1 Home Buyers’ Plan Qualifying home buyers can withdraw up to $ 25,000 ( couples can withdraw up to $ 50,000) from their RRSPs for a down payment. Home buyers who have repaid their RRSP may be eligible to use the program a second time. For more information: www. cra. gc. ca. Enter ‘ Home Buyers’ Plan’ in the search box.

2 GST Rebate on New Homes New home buyers can apply for a rebate of the federal portion of the HST ( the 5% GST) if the purchase price is less than $ 350,000. The rebate is up to 36% of the GST to a maximum rebate of $ 6,300. There is a proportional GST rebate for new homes costing between $ 350,000 and $ 450,000. For more information: Canada Revenue Agency www. cra-arc. gc. ca. Enter ‘ RC4028’ in the search box.

3 BC New Housing Rebate ( HST) Buyers of new or substantially renovated homes priced up to $ 525,000 are eligible for a rebate of 71.43% of the provincial portion ( 7%) of the 12% HST paid to a maximum rebate of $ 26,250. Homes priced at $ 525,000+ are eligible for a flat rebate of $ 26,250. For more information: www. hstinbc. ca/ making_ your_ choice/ faqs/ new_ housing_ rebate/

4 BC New Rental Housing Rebate ( HST) Landlords buying new or substantially renovated homes are eligible for a rebate of 71.43% of the provincial portion of the HST, up to $ 26,250 per unit. www. hstinbc. ca/ making_ your_ choice/ faqs/ new_ housing_ rebate/

5 BC Property Transfer Tax ( PTT) First Time Home Buyers’ Program Qualifying first-time buyers may be exempt from paying the PTT of 1% on the first $ 200,000 and 2% on the remainder of the purchase price of a home priced up to $ 425,000. There is a proportional exemption for homes priced up to $ 450,000. For more information: www. rev. gov. bc. ca/ rpt

6 First-Time Home Buyers’ Tax Credit ( HBTC) This federal non-refundable income tax credit is for qualifying buyers of detached, attached, apartment condominiums, mobile homes or shares in a

cooperative housing corporation. The calculation: multiply the lowest personal income tax rate for the year ( 15% in 2010) x $ 5,000. For the 2010 tax year, the maximum credit is $ 750. For more information: www. cra. gc. ca/ hbtc

7 BC Home Owner Grant Reduces school property taxes by up to $ 570 on properties with an assessed value up to $ 1,150,000. For 2011, the basic grant is reduced by $ 5 for each $ 1,000 of value over $ 1,150,000, and eliminated on homes assessed at $ 1,264,000. An additional grant reduces property tax by a further $ 275 for a total of $ 845 for seniors, veterans and the disabled. This is reduced by $ 5 for each $ 1,000 of assessed value over $ 1,150,000 and eliminated on homes assessed at $ 1,319,000+. For more information: www. rev. gov. bc. ca

8 BC Property Tax Deferment Programs Property Tax Deferment Program for Seniors. Qualifying home owners aged 55+ may be eligible to defer property taxes. Financial Hardship Property Tax Deferment Program. Qualifying low-income home owners may be eligible to defer property taxes. Property Tax Deferment Program for Families with Children. Qualifying low income home owners who financially support children under age 18 may be eligible to defer property taxes. For more information: www. sbr. gov. bc. ca and enter ‘ Property tax deferment’ in the search box or contact your municipal tax office.

9 Canada Mortgage and Housing ( CMHC) Residential Rehabilitation Assistance Program ( RRAP) Grants. This federal program provides financial aid to qualifying low-income home owners to repair substandard housing. Eligible repairs include heating, structural, electrical, plumbing and fire safety. Grants are available for seniors, persons with disabilities, owners of rental properties and owners creating secondary and

garden suites. For more information: www. cmhc-schl. gc. ca/ en/ co/ prfinas/ prfinas_ 001. cfm

10 CMHC Mortgage Loan Insurance Premium Refund Provides home buyers with CMHC mortgage insurance, a 10% premium refund and possible extended amortization without surcharge when buyers purchase an energy efficient mortgage or make energy saving renovations. For more information: www. cmhc. ca/ en/ co/ moloin/ moloin_ 008. cfm# reno

11 Energy Saving Mortgages Financial institutions offer a range of mortgages to home buyers and owners who make their homes more energy efficient. For example, home owners who have a home energy audit within 90 days of receiving an RBC Energy Saver ™ Mortgage, may qualify for a rebate of $ 300 to their RBC account. For more information: www. rbcroyalbank. com/ products/ mortgages/ energy-saver-mortgage. html

12 Low interest renovation loans Financial institutions offer ‘ green’ loans for home owners making energy efficient upgrades. Vancity’s Bright Ideas personal loan offers home owners up to $ 20,000 at prime + 1% for up to 10 years for ‘ green’ renovations. RBC’s Energy Saver loan offers 1% off the interest rate for a fixed rate installment loan over $ 5,000 or a $ 100 renovation on a home energy audit on a fixed rate installment loan over $ 5,000. For information visit your financial institution or go to : www. vancity. com/ Loans/ BrightIdeas/ or www. rbcroyalbank. com/ and in the search box enter ‘ energy saver loan’.

13 LiveSmart BC: Efficiency Incentive Program Home owners improving the energy efficiency of their homes may qualify for cash incentives through this provincial program provided in partnership with Terasen Gas, BC Hydro, and FortisBC. Rebates are for energy efficient products which replace gas and oil furnaces, pumps, water heaters, wood stoves, insulation, windows, doors, skylights and more. The LiveSmart BC program also covers $ 150 of the cost of a home energy assessment, directly to the service provider. For more information: www. livesmartbc. ca/ rebates

14 BC Residential Energy Credit Home owners and residential landlords buying heating fuel receive a BC government point-of-sale rebate on utility bills equal to the provincial component of the HST. For more information: www. sbr. gov. bc. ca/ documents_ library/ notices/ HST_ Notice_ 010. pdf 15B C Hydro Appliance Rebates Mail-in rebates of $ 25 – $ 50 for purchasers of ENERGY STAR clothes washers, refrigerators, dishwashers, or freezers until March 31, 2011, or when funding for the program is exhausted. For more information: www. bchydro. com/ rebates_ savings/ appliance_ rebates. html

16 BC Hydro Fridge Buy-Back Program This ongoing program rebates BC Hydro customers $ 30 to turn in spare fridges in working condition. For more information: www. bchydro. com/ rebates_ savings/ fridge_ buy_ back. html

17 BC Hydro Windows Rebate Program Pay no HST when you buy ENERGY STAR high-performance windows and doors. This offer is available until March 31, 2011. For more information: www. bchydro. com/ rebates_ savings/ windows_ offers/ current_ offers. html

18 BC Hydro Mail-in Rebates/ Savings Coupons To save energy, BC Hydro offers rebates including 10% off an ENERGY STAR cordless phone. Check for new offers and for deadlines. For more information: www. bchydro. com/ rebates_ savings/ coupons. html

19 Terasen Gas Rebate Program A range of rebates for home owners include a $ 50 rebate for upgrading a water heater, $ 150 rebate on an EnerChoice fireplace ( both good to March 31, 2011) and a $ 1,000 rebate for switching to natural gas ( from oil or propane) and installing an ENERGY STAR heating system ( good to Feb. 29, 2012). For more information: www. terasengas. com and in the search box enter ‘ rebates’.

20 Terasen Gas Efficient Boiler Program For commercial buildings, provides a cash rebate of up to 75% of the purchase price of an energy efficient boiler, for new construction or retrofits. For more information: www. terasengas. com and in the search box enter ‘ gas efficient boiler program’.

21 City of Vancouver Solar Homes Pilot This rebate of $ 3,000 ( about 50% of the cost) is for a Vancouver home owner upgrading to a solar hot water system from a gas system. Offered by the City of Vancouver, SolarBC, Terasen Gas and Offsetters on a first come, first served basis to March 2011 until the City reaches its target of 30 solar homes. For more information: www. vancouver. ca/ sustainability/ SolarHomes. htm

22 City of Vancouver Rain Barrel Subsidy Program The City of Vancouver provides a subsidy of 50% of the cost of a rain barrel for Vancouver residents. With the subsidy, the rain barrel costs $ 75. Buy your rain barrel at the Transfer Station at 377 W. North Kent Ave., Vancouver, BC. Limit of two per resident. Bring proof of residency. For more information: www. vancouver. ca and in the search box enter ‘ rain barrel program.’ Other municipalities have similar offers.

23 Vancity Green Building Grant In partnership with the Real Estate Foundation of BC, Vancity provides grants up to $ 50,000 each to qualifying charities, not-for-profit organizations and co-operatives for projects which focus on building renovations/ retrofits, regulatory changes that advance green building development, and education to increase the use of practical green building strategies. For more information: www. vancity. com

24 Local government water conservation incentives Your municipality may provide grants and incentives to residents to help save water. For example, the City of Coquitlam offers residents a $ 100 rebate and the City of North Vancouver, District of North Vancouver, and District of West Vancouver offer a $ 50 rebate when residents install a low-flush toilet. Visit your municipality’s website and enter ‘ toilet rebate’ to see if there is a program.

25 Local government water meter programs Your municipality may provide a program for voluntary water metering, so that you pay only for the amount of water that you use. Delta, Richmond and Surrey have programs and other municipalities may soon follow. Visit your municipality’s website and enter ‘ water meter’ to find out if there is a program.

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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 and comprehensive real estate listing website in the country. Each month, approximately four million unique visitors go to www. realtor. ca and view more than 145 million pages. The home listing information on www. realtor. ca streams from the Multiple Listing Service but does not contain the full collection of information on the system. The website is provided by Realtors across Canada to help market properties on behalf of their clients.

At any given time, there are approximately $ 1.35 billion in Canadian properties listed on the website. All totalled, 447,010 homes were sold through the MLS in Canada last year.

www. realtylink. org

This is the online version of the newspaper publication seen in real estate offices 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 a broad range of supporting information for those preparing to buy or sell a home.

www. rebgv. org

The Real Estate Board of Greater Vancouver’s ( REBGV) website offers detailed MLS ® statistics, monthly video 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.

www. recbc. ca

The Real Estate Council of British Columbia is the body responsible for licensing and regulating Realtors in B. C. Their website is full of valuable consumer protection information. A key feature of this site is the Complaints & Discipline section, which allows consumers to file complaints against anyone licensed to practice real estate in BC they believe hasn’t lived up to their legal and professional obligations. You can also read recent disciplinary decisions handed down by the Council.

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In real estate, like many other fields, professional representation is available for every step of the process. How much or how little representation you need or want will depend on your knowledge and background in real estate, as well as the amount of time you have to dedicate to the process.

The purchase or sale of real estate has significant financial implications for those involved, although the way in which the transaction unfolds can have more significant consequences for those involved than the price tag.

“ It’s critical to understand your comfort level going in. Buying or selling a home is the largest financial transaction that most people will ever be a part of and you want to ensure that all aspects of the transaction are handled in an efficient manner that helps protect you,” Jake Moldowan, Real Estate Board of Greater Vancouver president said. “ Realtors provide clients with professional representation in a real estate transaction. As your agent, they are duty-bound to work and advocate in your best interest.”

Realtors provide a broad range of services, depending on individual business models and the agreement between you and your Realtor as to which services you want.

Depending on that agreement, services may include helping you determine the value of your home if you’re a seller, or helping you establish a reasonable purchase offer if you’re a buyer. It may include listing a property for sale on the Multiple Listing Service ( MLS) to bring it to the attention of Realtors working on behalf of buyers. It may include marketing a property on www. realtor. ca or www. realtylink. ca, in a local newspaper, on signs, via open houses or other advertising vehicles. It may include help negotiating the sale if you’re the seller, or the purchase price and conditions if you’re a buyer. It may include seeking advice on conditions and appropriate subjects.

There are a lot of ‘ mays’ in the range of potential services, again depending on a Realtor’s specialties, i. e. residential, commercial, the types of services a Realtor offers, and the types of services you choose.

What’s equally valuable is the level of protection you gain from hiring a Realtor. Buying a home is the most significant purchase most people make in a lifetime. A Realtor brings assurances and safeguards to the process.

Each stage of the transaction occurs in front of a well-regulated backdrop created over many years to protect the public. This includes Realtor insurance, an assurance fund, and multiple avenues of recourse if someone feels their agent did not act in accordance with their professional and contractual obligations. Those avenues include the BC Real Estate Council and the appropriate real estate board.

Here’s a more comprehensive list of the protections that come from working with a Realtor:

Standards, legislation and requirements

The real estate profession is one of the most highly regulated in the country. The Real Estate Council of BC is a regulatory agency established by the provincial government to protect consumers through the licensing of all individuals who practice real estate in the province. The conduct requirements for all real estate licensees and brokerages include: 1. Undivided loyalty. The brokerage must protect the client’s negotiating position at all times, and disclose all known facts, which may affect or influence their decision. 2. Obey all lawful instructions of the

seller. 3. Keep the confidences of clients. 4. Exercise reasonable care and skill in

performing all assigned duties. 5. Account for all money and property placed in a brokerage’s hands while acting for the client.

The above speaks to the minimum required under the Real Estate Services Act. Realtors are subject to a higher standard. As members of their local real estate board, Realtors are also required to adhere to the Canadian Real Estate Association’s REALTOR ® Code and Standards of Business Practice.

Both the Real Estate Council of BC and the 12 BC real estate boards use a comprehensive investigatory and disciplinary process to deal with complaints. Realtors who are found to have breached either the legislation or the REALTOR ® Code are subject to sanctions by their board and/ or the Real Estate Council.

Realtor duty to disclose

In 1991, the BC Real Estate Association, the provincial association for Realtors, introduced the Property Disclosure Statement ( PDS). This document is a detailed form that asks a property seller to disclose any defects to a prospective buyer. This document is not required by law, however, the Realtors of BC decided to make the PDS ( and associated forms, the Strata Property Disclosure Statement and the Rural Property Disclosure Statement) available to any client wanting to list a home on the MLS. The PDS can be legally incorporated into the Contract for Purchase and Sale.

The PDS goes beyond current legal disclosure obligations and requires that potential problems be itemized for prospective buyers, such as buried fuel storage tanks, asbestos insulation, unauthorized rental suites, renovations done without a permit, moisture problems, unregistered easements or encroachments, and whether the home was ever used as a grow-op or drug lab.

Although the PDS is never a substitute for a thorough, professional home inspection, it is a great place for buyers to begin their due diligence investigation into any home they are hoping to purchase.

By choosing to make the PDS mandatory, the Realtors of BC sought to provide the public with an additional level of certainty when they purchase a home.

Special Compensation Coverage

The Real Estate Compensation Fund Corporation is authorized by the Real Estate Services Act and provides protection for consumers who have lost deposit monies entrusted to a real estate licensee ( or an unlicensed individual related to the brokerage, for example, a receptionist, director or officer) that is misappropriated, wrongfully converted, intentionally not paid or accounted for or obtained by fraud. As a condition of licensing, it is mandatory for all Realtors to participate in the fund.

Transaction deposits held by real estate brokerages are protected by the Special Compensation Corporation and are held by the Realtor’s brokerage as the stakeholder until the transaction completes or the parties give instructions as to the disposition of the deposit. Deposit monies can only be removed from a brokerage trust account under specific circumstances – check with your Realtor for more information.

Errors and Omission insurance

Anyone licensed to engage in real estate in BC is required to have Errors and Omission Insurance. This provides coverage for professional errors made in the contract phase.

Recourse for the public

Both the Real Estate Council of BC and the 12 BC real estate boards have an investigatory and disciplinary process to deal with complaints. Realtors who are found to have breached either the legislation or REALTOR ® Code are subject to sanctions by their board and/ or the Council.

Real estate boards deal with breaches of the REALTOR ® Code. The Real Estate Council of BC deals with breaches of the Real Estate Services Act.

The Professional Standards Department at the Real Estate Board of Greater Vancouver ( REBGV) educates members about professional conduct, and resolves and mediates complaints and concerns of both members and consumers. Where a resolution isn’t possible, files can be forwarded to the Board’s Professional Conduct Committee for further review. The REBGV website is www. rebgv. org.

The Real Estate Council enforces entry qualifications, investigates complaints and imposes discipline under the Real Estate Services Act. The Real Estate Council of BC website is www. recbc. ca.

Realtor education

Realtors complete educational and licensing requirements and must be of good reputation in order to become licensed.

Realtors are committed to continuing education and consistently refine and improve their skills and professional knowledge through participation in the profession’s required Professional Development Program.

Every two years, Realtors must complete a required number of course credits as a condition of continued membership in their Board. These courses are designed to keep Realtors up-to-date with new and changing information relating to real estate.

As licensees, Realtors are also required by the Real Estate Council of BC to complete a re-licensing education program every two years.

(* REALTOR ® and MLS ® are trademarks owned by the Canadian Real Estate Association.)

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“ Using the MLS gives unmatched exposure to properties for sale. If you’re selling your home, a listing on MLS will be shared with other Realtors for the broadest distribution possible. If you’re buying a home, MLS will have the largest pool of homes to choose from.” JAKE MOLDOWAN REBGV PRESIDENT

Housing market information originating from the Multiple Listing Service ( MLS) has long been recognized as the most reliable and comprehensive data available for those looking to buy or sell a home.

The strength of this more than 60-year-old system rests in the quality and accuracy of the information. Government, economists, fi nancial institutions, appraisers and others all rely on MLS data. This is because Realtors who submit the listing information, and MLS staff at real estate boards who conduct quality control, are trained and educated in the complexities of real estate.

“ Using the MLS gives unmatched exposure to properties for sale,” says Jake Moldowan, president of the Real Estate Board of Greater Vancouver. “ If you’re selling your home, a listing on MLS will be shared with other Realtors for the broadest distribution possible. If you’re buying a home, MLS will have the largest pool of homes to choose from.

“ The MLS also serves as the foundation of our property taxation system by providing reliable information, backed by professional accountability, to government bodies responsible for assessments in our province,” Moldowan said.

Realtors know how to describe a property accurately and what information must be disclosed in an MLS listing. For instance, if there is a restriction on the use of a property, something called an easement, this information must appear in the MLS listing.

Many alternate systems and services exist to buy and sell homes and they all compete for customers. The MLS is the Realtor option.

Why www. realtor. ca is a great advertising vehicle for property sales.

The public website www. realtor. ca is not the MLS system. Local MLS systems are owned and operated by local real estate boards, for use by Realtors. Consumers have direct access to information about MLS listings through www. realtor. ca, an advertising vehicle which was named www. mls. ca until 2008.

Each month, approximately four million unique visitors go to www. realtor. ca and view more than 145 million pages. More than half a million people located in B. C. log on to the website each month.

At any given time, there are approximately $ 1.35 billion in Canadian properties listed on the website.

The home listing information on www. realtor. ca streams from the MLS but does not contain the full collection of information on the system. The website is provided by Realtors across Canada to help market properties on behalf of their clients.

How does the MLS work?

Realtors compete with each other for your business, but at the same time cooperate to help you buy or sell property. That unique concept of cooperating while competing led to the creation of the MLS in 1950 by the Real Estate Board of Greater Vancouver.

The MLS is fundamentally a cooperative marketing system that helps the public buy and sell real estate. It’s a system for sharing information between Realtors on homes for sale.

“ Through the MLS system, the Realtor who represents a seller is inviting all other Realtors to off er that home for sale to their buyers. Sellers therefore have all the Realtors in their community seeking buyers for their homes. For buyers, it’s a one-stop shopping experience,” Moldowan said.

“ By having Realtors agree to share their inventory with one another, a more effi cient marketplace is created,” Moldowan says.

If the MLS system did not exist, sellers would have to choose an individual real estate brokerage to list their home and only that brokerage would have the information about it and the ability to show and sell it. If the MLS system did not exist, buyers would have to go from Realtor to Realtor to view the listings of each individual brokerage.

“ Sellers and buyers often decide to work with a Realtor because they want expert guidance through a complex process. For this important transaction, people want to select someone they are comfortable working with and who off ers the services they are looking for at a price they can agree on. The MLS system provides consumers a vast range of choices,” Moldowan says. (* REALTOR ® and MLS ® are trademarks owned by the Canadian Real Estate Association.)

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PUSHING THE ECO ENVELOPE: Canada Mortgage and Housing has selected 14 builders to deliver super energy-saving homes under its Equilibrium Housing Demonstration project. One of the homes is in Burnaby and will open for tours this year. CMHC hopes the projects will result in “zero energy use” houses and apartments. Photo: CMHC

Canadian housing sales will gain traction in the second half of this year, according to the Canadian Real Estate Association (CREA), which has released a more bullish outlook on the market than its earlier forecast at the end of 2010. CREA now estimates there will be 439,900 existing homes sold in 2011, down 1.6 per cent from 2010, but better than the 9 per cent decline that CREA had forecast in December. The association is also taking a more positive view of pricing, with the national average price now expected to rise by 1.3 per cent in 2011 to $343,300. CREA had earlier predicted that the national average home price in 2011 would fall by 1.3 per cent from last year to $326,000. Meanwhile, Canada Mortgage and Housing Corp. reports that the pace of new-home construction in Canada increased slightly last month, rising to 170,400 units, up from 169,000 in December on a seasonally adjusted annual rate. That puts the country on a pace for about 10 per cent fewer housing starts than last year. Krishen Rangasamy, an economist at CIBC World Markets said housing starts will likely soften over the coming months as home prices moderate and the Bank of Canada resumes its tightening cycle by mid-year. Some economists have warned that a combination of higher interest rates and new mortgage rules that go into effect March 18 could put a chill on demand in the later months of this year. CREA, however, predicts that the market will gain traction in the second half of 2011 as economic conditions, job and income growth and consumer confidence improve, in contrast to 2010 when economic growth slowed.

Rising mortgage rates may fire market

Fraser Valley realtors say the recent hike in mortgage rates may fire up the housing market as buyers try to get in before rates rise higher and new mortgage rules kick in next month. Major banks, led by TD Canada Trust and CIBC, have raised some of their fixed-term mortgage rates by as much as a quarter of a percentage. This means the TD five-year fixed rate mortgage, a popular choice among buyers, increased by a quarter of a percentage point to 5.44 per cent. CIBC hiked its mortgage rates similarly, increasing its five-year closed mortgage by 0.25 percentage points to 5.44 per cent. The hikes come one month after the federal government announced changes to lending rules, made in an effort to control skyrocketing household debt levels in Canada. Finance minister Jim Flaherty reduced amortization periods to 30 years from 35. He cut the amount of mortgage refinancing to 85 per cent from 90 per cent of home value. He also announced the federal government would no longer back home equity lines of credit.

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BEST PAYOFF: A kitchen renovation pays back up to 100 per cent of the investment when the home is sold, a CMHC analyst told a renovation meeting last week in Coquitlam. Before and After photos courtesy of Kenorah Construction & Design of Delta.

The metro Vancouver is strong, but some areas are stronger the others – and they are also proving to be the most expensive. “There was a healthy balance between the number of home buyers and sellers in our market in January, but there’s always variation in activity from region to region,” said Jake Moldowan, president of the Real Estate Board of Greater Vancouver (REBGV). “We’re seeing strong sellers’ market conditions in areas like Richmond and the west side of Vancouver.” Over the last 12 months, price of a typical detached house (the benchmark price) increased 22.6 per cent in Richmond and 12.2 per cent in Vancouver West. In comparison, detached home prices across the region increased 2.7 per cent over the same period. “When you’re looking to buy or sell a home, it’s important to familiarize yourself with the wider trends in the market. It’s equally important to seek out knowledge of your local area so you understand current market conditions in your neighbourhood,” Moldowan said. At 10,438, the total number of residential property listings increased 5.8 per cent in January compared to last month and increased 2.2 per cent from this time last year. Sales of detached properties in January reached 793, an increase of 12.5 per cent from the 705 detached sales recorded in January 2010. The benchmark price for detached properties increased 2.7 per cent from January 2010 to $810,045. Sales of condo apartments were 713 last month, a decline of 20.8 per cent compared to the 891 sales in January 2010. The benchmark price of an apartment property increased 1.4 per cent from January 2010 to $390,935. Attached (normally townhomes) sales in January totalled 313, a decline of 4.3 per cent compared to the 327 sales in January 2010. The benchmark price of an attached unit increased 2.6 per cent between January 2010 and 2011 to $495,140. Your local Realtor has accurate information on all metro markets. Sales, renos will both increase Both sales through MLS and home renovations will increase this year, according to Canada Mortgage Housing Corp. senior analyst Robyn Adamache. Speaking to professional home builders and renovators this month, Adamache said MLS sales in Metro Vancouver will rise slightly from 2010 to around 37,000 units. She also forecast that home renovations would rise to $4.37 billion this year in the Metro region, up from $4.09 billion in 2010. Copyright Real Estate Weekly