Calgary Real Estate predictions?

[Red]

Originally Posted by mrkajz44

Not a realtor here, but this is exactly what our realtor recommended to us. We were unsure if we should offer and he said that as long as we put on some conditions, we can always back out for virtually no reason (oh, the financing fell through...)

Best of luck!

I'd drop that realtor on the spot. Financing has to actually fall through before you can use it as an out. You can't just pretend that it did.

Be careful out there, sounds like your guy is sleazy.

[Red]

Originally Posted by darklord700

I have buyers backed out on their conditional offer for no reasons. All I could do was to return their deposit and I thus questioned the need to take a deposit in the first place all when the buyers could just back out on a whimp.

No reason? Something is not adding up. They have to give you a reason and it has to be within the sale conditions.

[GP_Matt]

I agree with Red. I think it could leave you exposed to a lawsuit if you tried to back out but had perfectly good financing.

What your realtor told you was slimy and I would drop them over it. (In fact, I dropped a realtor previously who suggested the same thing.)

[troutman]

Originally Posted by old-fart

I'm sure any of our resident Realtors can confirm that sometimes conditions like financing and home inspection are actually used to give the buyers time to change their mind and have an "out".

Typically the buyer has to demonstrate "best efforts" in removing the financing condition. You can often set the inspection condition so that the buyer can only back out if the remedy is more than a certain $ amount or % of the purchase price.

The conditions are not meant to be a way for the buyer to back out of a deal if they have buyer's remorse.

[V]

I thought financing conditions also included a clause that if the buyer couldn't get financing the seller would be able to finance the sale at x%, usually a number higher than what the banks would offer. I remember that being on an old sale contract I was involved with. I don't know how many sellers would actually be able to provide that financing, but I still thought it was there.

[Hockeyguy15]

When we were selling our place there were a few offers that fell through because of financing, and all of them asked for an extension on the original condition because they had to check with the other mortgage insurers. I would be suspicious if someone just up and said "couldn't get financing" without communicating issues before hand.

[Hockeyguy15]

Originally Posted by V

I thought financing conditions also included a clause that if the buyer couldn't get financing the seller would be able to finance the sale at x%, usually a number higher than what the banks would offer. I remember that being on an old sale contract I was involved with. I don't know how many sellers would actually be able to provide that financing, but I still thought it was there.

It depends how they write the condition but they can specify things like XX% interest rate or $XX monthly payment, or they can be general and just say pending financing with no terms.

Edit: What I said doesn't really apply to your question. I've never heard of what you are talking about, is that when they assume the mortgage?

[old-fart]

Originally Posted by troutman

Typically the buyer has to demonstrate "best efforts" in removing the financing condition. You can often set the inspection condition so that the buyer can only back out if the remedy is more than a certain $ amount or % of the purchase price.

The conditions are not meant to be a way for the buyer to back out of a deal if they have buyer's remorse.

Awesome - that's good to know. I've always found real estate deals to be a bit odd - probably the most major financial decision of your life and it has a 6 hour time limit.

We didn't write any specifics around the removal of the clauses (i.e. demonstrated ability or lack thereof on financing or stipulation around the x% of purchase price on home inspection remediation etc.). Our Realtor told us these were both very standard conditions using standard language, so we signed off on them. I'd guess we are somewhat SOL on those now. My current house is only about 15 years old, we just had the roof replaced in spring '14 and have had no major water leaks or foundation issues or anything, so I'm not particularly worried about a legitimate home inspection issue.

[kevman]

Originally Posted by ExiledFlamesFan

http://calgaryherald.com/business/re...ls-in-december
Not surprising that the housing market is cooling significantly. Down almost 5% since the peak of June.

Don't get too excited, ignoring 2013 which appeared to be an anomaly a drop of 5% from June to December is a fairly normal seasonal trend for Calgary.

Median Prices
Year June Dec %Change
2014 490 478* -2.4 (*November)
2013 450 464 +3.1
2012 430 420 -2.3
2011 417 394 -5.5
2010 419 389 -7
2009 399 401 +0.5
2008 408 380 -6.8
2007 439 406 -7.5
2006 386 368 -4.6
2005 249 274 +10
http://www.bobtruman.com/SFH_DailyMo...e_1869385.html

[Hockeyguy15]

Originally Posted by old-fart

Awesome - that's good to know. I've always found real estate deals to be a bit odd - probably the most major financial decision of your life and it has a 6 hour time limit.

We didn't write any specifics around the removal of the clauses (i.e. demonstrated ability or lack thereof on financing or stipulation around the x% of purchase price on home inspection remediation etc.). Our Realtor told us these were both very standard conditions using standard language, so we signed off on them. I'd guess we are somewhat SOL on those now. My current house is only about 15 years old, we just had the roof replaced in spring '14 and have had no major water leaks or foundation issues or anything, so I'm not particularly worried about a legitimate home inspection issue.

Just take a look at the offer you signed, there should be a separate sheet for the property inspection and it will have all the details on there.

[Travis Munroe]

To clarify, Troutmans statement was correct for the longest of times. Last year the document was changed as it proved to be pointless.
"I can back out if there is $5,000 in repairs needed to the property"
I really dont want the house anymore so I will grab quotes from the most expensive places in town. Really, repairs would be about $2,500 but it won't be hard to get that number to $5,000 on paper if I went the highest route.

As for backing out on any condition, while you may call it dirty of sleazy, the ultimate goal is to protect your client (the buyer). The way a property inspection condition is today, I can literally say it didnt meet my needs and walk away with little to no questions asked so irrelevant to the financing, the home inspection is the "easy out". I still to this day am haunted by a newly renovated house I was selling and the buyers walked away claiming the inspection didnt pass. After some push back we received the report so we could fix the problems. The buyer said they were not interested, the house never did sell & the inspection report was the cleanest report I have witnessed in my career. The issues were taken care of in under 3 hours by the owner.

[Travis Munroe]

Originally Posted by Hockeyguy15

Just take a look at the offer you signed, there should be a separate sheet for the property inspection and it will have all the details on there.

Re: the newest offer to purchase

You do not need to attach the additional forms for financing or inspection.
Inspection has an area that asks if you attached an additional form. I always check no as the inspection condition, although worded in a short manner, states that the buyer can walk for any reason related to the inspection.
As for financing, many realtors often leave the percentage, term and monthly payment blank. This is dangerous as I could be a real stick in the mud and tell you that you did receive financing and my sellers are holding onto the deposit. The buyers will prove that they were turned down and I will make a call to my mortgage broker to find a B/C lender who will finance the deal at a much higher interest rate. Always ensure you have a percentage and term written in!

[Hockeyguy15]

Originally Posted by Realtor 1

Re: the newest offer to purchase

You do not need to attach the additional forms for financing or inspection.
Inspection has an area that asks if you attached an additional form. I always check no as the inspection condition, although worded in a short manner, states that the buyer can walk for any reason related to the inspection.
As for financing, many realtors often leave the percentage, term and monthly payment blank. This is dangerous as I could be a real stick in the mud and tell you that you did receive financing and my sellers are holding onto the deposit. The buyers will prove that they were turned down and I will make a call to my mortgage broker to find a B/C lender who will finance the deal at a much higher interest rate. Always ensure you have a percentage and term written in!

Good to know, I just assumed the form for the inspection was always included since everyone of the 5 offers we got included it. Only 2 of the 5 included specific financing terms, the other 3 were blank.

[Kavvy]

edit - nm - pm'd

[ExiledFlamesFan]

Originally Posted by kevman

Don't get too excited, ignoring 2013 which appeared to be an anomaly a drop of 5% from June to December is a fairly normal seasonal trend for Calgary.

The oversupply and lack of demand is the concerning thing. Check back in the spring for a better idea of the true market conditions.

[kevman]

Originally Posted by ExiledFlamesFan

The oversupply and lack of demand is the concerning thing. Check back in the spring for a better idea of the true market conditions.

I'd agree that oversupply and lack of demand is concerning. If it were true...

Sales appear to be fairly normal for this time of year:


Meanwhile inventory in December is up compared to 2012 and 2013 but is nowhere near as high as 2007 and 2008:


Inventory as a whole is still relatively low:


Finally the absorption rate is still strong and lower than historical norms:
http://www.bobtruman.com/SFH_DailyMo...e_1869385.html

Things, at least for the time being, appear to be fairly stable. Now, summer of 2016 or 2017 could be another story if oil continues to stumble.

[Kavvy]

Originally Posted by kevman

I'd agree that oversupply and lack of demand is concerning. If it were true...

Lots of graphs
.

Thank you for this post! It makes the Calgary Herald article look like click bait as it doesn't appear to be telling the entire story.

[stampsx2]

Anybody know what happens if i sell a house and the fridge craps out before possession date? I would think i would be on the hook for a new fridge of equal or greater value?

[Travis Munroe]

Originally Posted by stampsx2

Anybody know what happens if i sell a house and the fridge craps out before possession date? I would think i would be on the hook for a new fridge of equal or greater value?

My knowledge is that it is the responsibility of the seller.

Everything has to be in the same/similar condition as to when you viewed the property. If you can prove that the fridge was working (which should be easy assuming people were living there when you first previewed the house) then it is apparent the fridge is not in the same working order.
If it crapped out a day after you took possession..... that's just bad luck but your responsibility.

[stampsx2]

Originally Posted by kevman

I'd agree that oversupply and lack of demand is concerning. If it were true...

Sales appear to be fairly normal for this time of year.....

If the boc threatens to raise interest rates that may give the real estate market a push for 2015, at least until the rates actually go up. Will it actually happen this year is hard to say.