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Michele Talks Local Trends and Buying Pre Construction!
March 1, 2022 | Posted by: Michele Cummins
Warning! ;) This is a digitally automated transcript of the show so there will be mistakes throughout - including the spelling of Michele's name!
Curtis Pope:
joined by the one and only Rockstar realtor Michelle Cummins for the company's Real Estate Group show. My name is Curtis Pope. How you doing Michelle?
Michele Cummins - PREC:
Hello, Curtis? Oh, you know what, you don't have to say your name. You people hear your voice and they're like fast Curtis? Oh,
Curtis Pope:
no, I think they run the other way.
Michele Cummins - PREC:
Can you believe it's the last Saturday of the month?
Curtis Pope:
I'm trying not to think about it.
Michele Cummins - PREC:
I know. I know. But you know, we've had a fabulous February actually, the weather wasn't bad. And especially the last week, so many beautiful sunny days.
Curtis Pope:
No, it was one of those things too, because we had that kind of weakest spring about two weeks ago. And everybody was like, oh, you know, it's so great. Spring has arrived and went not so fast as a February baby. I know that things will turn and yes, it got cold. Last couple of weeks raising but we've seen some nice sun too.
Michele Cummins - PREC:
It's true. I'm like, I want to go for a bike ride. I want to go for a walk. Actually, I you know, was that my Vancouver place that just walked out the salt Creek was just there for you know, actually, a day or two. But it was a lot of fun and beautiful. And you're right, just freezing freezing in the snow, even snow. But you know what? It's all good. Because you know, now it's raining and where where we have sun. We do need rain. We want to see those flowers bloom, don't we?
Curtis Pope:
That's right. We want the flowers to bloom. And we know that we go through a little bit of rain, and then we get to summer and you can get your motorcycle out?
Michele Cummins - PREC:
Yes. Oh my gosh, every day. I'm thinking of that. So great. Great news. Last week, of course, we the the removal of the emergency act, thank goodness. I don't know about you, Curtis. But I know a lot of people and there was a lot of talk on the street, everyone was taking their money out of the bank. So thankfully, that has been overturned and removed. And we no longer have to deal with the emergency act.
Curtis Pope:
Money in the Bank. So I didn't nothing to worry about. So I would three teenagers around I really had nothing to worry about. They take care of that. For me.
Michele Cummins - PREC:
That's just natural. Exactly every day. Well, it is it was a concern. And I saw some fear and some uncovered, you know, in the real estate market. So buyers were concerned sellers were concerned. Of course everyone was concerned. But luckily, that's been removed. And the first segment we're going to talk about actually the real estate market. what's hot, what's happening right now. And what what is this year going to look like? What is the spring gonna look like? Because guess what spring has already sprung. And the next segment, we are going to talk about pre sales and new home construction. So first of all, mid February, the Real Estate Board showed 50% more new listings that hit the market. Do you see the have you been seeing more signs yourself, Curtis? And just notice that Oh, absolutely.
Curtis Pope:
You know, not so much in my neighborhood, but around the radio station here and in my old neighborhood. So I wanted to get gas either at the gas station there. There were like three signs up in that neighborhood. So yeah, there's definitely a few more signs popping up.
Michele Cummins - PREC:
Oh, where yeah, we're typically you know, I don't know, a couple listings a week. You know, I've had like more than five and every single day looking at offers and actually I just listed one nearby you off sandstone.
Curtis Pope:
Oh, very nice. Okay. Those are the houses with the huge properties.
Michele Cummins - PREC:
And well yeah, so we're 23,000 square feet. So we'll talk about that later about the new listings that just hit the market. And there's an open house this weekend everything so but it's gorgeous. Yeah, a really nice one. But you know what sellers and buyers have been having this fatigue I call it sellers fatigue because they've been scared to sell without finding a place or knowing what they'd be able to get into simultaneously while selling so that's been a big fatigue especially those in like land assemblies or in situations where they need to make sure they find a place before they sell. It's really hard to do in this in this market. So there's been the sellers fatigue but buyers fatigue of course because they have been their emotions are going up and down, up and down with missing out on every single one they try for it and here's they're giving up inspections they're giving up all these the the careful things that you want to have your buyers due diligence You know, that is BC that is the rules. And so they've been giving up all their all those abilities to try to put in subject free offers, just move them. So we've got these buyer fatigue, but just in the last last weekend, and this week, actually I had clients, buyers specifically say, Michelle, we're going to hold off because we feel like the markets going to be better for us in a couple months. And that is half, if that's happened to me a few times this week, that has definitely happened to many other realtors as well. And so I've seen that shift buyers kind of holding off, waiting to look to see if there's a day set for time and day for looking at any and all offers on a listing. There's, they're waiting, they're waiting it out, I had a listing presentation set for one of my new listings every day, last week, every single day. And what happens? Well, we sold all of them, however, and offer asking price or a little over a couple of them, but a couple of them had subjects and it wasn't a multiple offers. Me along with so many other realtors in the Fraser Valley had seen the shift just in the past week and a half. And it is due because most sellers are starting to feel a little more confident they're wanting to get ahead of the spring market. And even I've told a lot of my clients, you know, get ahead of the spring market, maybe listen mid February, the end of February. And that would be really good. And a lot of people have thought that way. And so we're seeing that. So spring has definitely wrong. And but you know, what does that look like kind of moving forward, because we've got interest rates that could start rising next week, a quarter percent next, sorry, next month in March. And and we've got that happening a couple more times this year. So you know, what, less multiple offers. So that's pretty much what we're seeing buyers holding off a little bit longer, more listings to choose from. So sellers under will have to and should start understanding that this shift has started. And they did say that the real estate market was going to rise a bit over 5% this year. But that is in the first quarter of the year, I honestly believe it's not going to continue rising throughout the year, especially with interest rates going up. So before I get ahead of myself, I wanted to say the economists are saying that of course the the market is still going to be strong in 2022. And that is going to start really correcting more in 2023. They also are saying and they're kind of all over the place between like 15 16% to 30% of a correction that may happen. The industry, those in the business are saying probably 15 to 18% or so. And typically I've studied the real estate local real estate market since the early 1900s. And typically we go down 10 to 12%, after a big hike. So that's the normal correction. And but this time, we have such a higher highs than we ever have seen before. I mean, it's like 100% in the last few years. That's extreme. So we've had an extreme highs. Now, if it didn't 30% correction, it seems extreme to say 30% lower than we are now. But it's not that extreme, when you look at it, that it's gone up about 100% in in the last couple of three years. So you kind of have a look at it. I called the last few years, this largest pipe that we've ever seen the COVID market height. So that's what I call it. So but I'm concerned about the market due to the way the government creates these corrections. So after every height, the government implements new taxes, they did it with the property transfer tax. And the last correction, they did it with the foreign buyers tax and the empty home black. Now they're talking about passing your primary residence with a capital gains tax. So along with of course, the raise rising of the interest rates, which always coincides with the taxes that they implement in order to cause the correction. So they cause us to pay more money. And they think that saves us money. I don't know how that how that works. I mean they make trillions of dollars in property transfer tax every year, they're already making money on our primary home. They're already making that property transfer tax. They get that they make money on our homes, by the buyers paying that for every property they purchase. So it's not like they're not getting money from our primary home. It's the only thing we actually have. That's a positive investment that's not taxed on it. The only thing is the roof, the primary this our home, the roof over our heads and our family's home where love is and where we raise our children. It's the only thing we have that we can actually sell and not be passed on and now they're wanting to take that away. So as you can see I'm very upset about that tax and I'm passionate about doing what I can to to go to our MPs MLAs everyone we can to try to stop that. Because if if they implemented the way they did with the foreign buyers tax, watch out, it's going to be scary. So they hopefully will not do that. And you know what? All of our listeners if you want to listen to next week's show, because this really goes hand in hand with this show next week is our stats show. So it was a no mid February has shown 50% More listens on the market. All of a sudden, we really see the staff next week on our show. And we have a guest, Jessica Oates from Harmony mortgage and does the division of Dominion Lending. And she's going to be with us at to prepare us for what's to come with the interest rate hikes, and how we invest and in the wisest way, we can either purchase a home or refinance a home, and she's going to share with us some tips on that next week. Sounds good? Yeah.
Curtis Pope:
Well, with that we're getting pretty close to time here. So we should probably take a break. If people want more information about what you do as a realtor and maybe to see your listings and things like that. Where can they go? Michele Cummins, - prec. Ca and we're back with more right after this. Number two of the company's Real Estate Group show with Michelle Cummings in myself Curtis Pope. Now a lot of people are talking about pre sales now, Michelle, where you buy it before it's built? I'm like, Yeah, which must be kind of weird. Because you're buying something it's gonna be there. But it's not there yet.
Michele Cummins - PREC:
I know. It's like empty space. It's like buying air.
Curtis Pope:
It's like buying a radio commercial. You're going What am I buying? You're buying airtime? What does it look like? It's air?
Michele Cummins - PREC:
Exactly. The hammer on the head, you hit some? Yes,
Curtis Pope:
I think that's a hammer on the head. Now we know it's not just words, it's metaphors. restring. Then I'll forget X. And again,
Michele Cummins - PREC:
I don't tell jokes. I don't apparently tell metaphors. Let's just leave it at that. Yeah, pre sales, I've had so many clients at you know, older new ask me about pre sales and wanting to buy pre sales. Really, they're wanting to buy something today for tomorrow's game, because the markets been going up. And typically, pre sales are sold, you know, at a good rate today. And then closes minimum like usually a year from now, two years, three years, sometimes even up to five years or so. You're, you're you're buying for pre sales, but there's some tips and tricks, and some ideas for you, I wanted to share because buying pre construction and new construction. I mean, there's a lot you should know, and a lot of people don't know, being I'm a certified new home construction specialist. So being that having that. And being the sales manager for new home developments, I understand what is often missed by buyers, and a lot that you wouldn't know, if you didn't ask. And a lot of people don't ask so and what to negotiate for and what to be aware of. So, you know, you can't get a pre approval for something 1235 years from now. So a lot of people go without my family financing. Well, you don't worry about your financing today, because there is no such thing as a pre approval for such a thing that is air, the bank is in kind of guarantee air. So of course, they're not going to pre preview on something. So you have to be aware of that. And you have to understand that, you know, you're investing a chunk of money today, and you're hoping to be able to compete on it. So you want somebody like a financial planner, somebody like a realtor or mortgage broker, who will help you build your your ability to be able to close on it when it comes time for completion. Or maybe you're going to flip it. So if you're going to flip it, which is called assigning it, you've want to make sure there's an assignment clause in the contract and what does that look like? Are you going to have to pay the developer 1% 3% on the purchase price of what you sell it for? That's a big chunk of money. So make sure you're aware of that. Are you able to negotiate that well possibly at you know younger up to anticipate the rates that will be in the future if you want to close on it. So you really want to talk with advisors to help you with that. But pre sales is a great idea. So the deposit structure very different than your typical purchase. So sometimes it's 15% 20%. And it's structured usually as a first deposit, second deposit. Third deposit. Once, when you get an accepted offer when you write the offer, and then again, after your seven day rescinding period that you get with with pre sales, there's no such thing as subjects, except for lino having a look at the disclosure statements from the developer. But otherwise, there's really no subjects to have on it. As long as you've seen everything that you've learned, you need to see the spec sheets and all of that the Floor Plan attached to the contract, you're really buying something that isn't there yet. So you just want to be as prepared as possible. And you want to make sure that that you get some perks, hopefully, so make sure the deposit is where it's at, and who is going to get the, because it goes into a trust account, usually the developers lawyer trust account, or the developers trust account, but usually their lawyer, and there's usually interest that that is paid on that deposit, and who gets that interest. So some things to know is, is maybe if you gave a higher deposit, maybe the developer be willing to throw in things that you would normally have to pay for, in some cases, such as maybe an air conditioning unit, maybe they don't give it to you within the purchase price, or maybe the washer and dryer is an upgrade. So maybe you can get that there's some things you possibly could negotiate with the with the developer, and assignments, just make sure if you want to assign it, that, that that clauses in there and that you're able to and and what that looks like so that's when you definitely want to have a representative. Don't just go straight to the sales manager, if you can have a representative need a representative, you should have a representative, and warranty. So different provinces have different rules and regulations on their warranties. So be sure to check the BC New Home Warranty site for VCs to five and 10 year warranty on the homes and what that looks like. And don't forget that the first year the builder warranties, the home, what does that look like? You can actually call me if you'd like or touch base with me if you have more questions about this, but the completion date, okay, let's talk about that. Because the developer has an outside date. What is an outside date? Well, that date is there's an estimated completion date. But then there's an outside date to where if the builder has any hiccups, any delays, there's any strikes or or you know, natural, you know, certain disasters, anything that may delay the build, they have an outside date for typically one year, sometimes one and a half years, to where they can keep on pushing the completion date out should they need to. But also be careful with that outside date of the time that they need to give you a heads up of when they're extending it because it's really hard to change. You know, you're maybe you gave notice your attendance and you didn't notice already, maybe your movers are all ready to go and you're paying for a boon to store your furniture and who knows your situation. But if you only have two weeks notice from their developer every single time they push out the date, that's gonna make life very stressful for you, even a 30 day, which is typical notice that developers give you but just be prepared for that. And then the deficiency walkthrough. So what is that? Well, that is your walkthrough with the builders, representatives, typically one week before completion date, where you walk around the home with some green paper blue tape, and you mark every single deficiency you see in the home. And it's written out, all parties sign it, and the builder does his best to finish the incomplete the deficiencies before completion or possession date. Now, a lot of people don't know this, but you can actually hire an inspector to actually go and inspect that new home, you think why would I need an inspector to inspect the brand new home when it's warrantied? Many reasons why, for instance, I had a buyer who was buying a new home and we hired an inspector, and he found that part of the roof was installed improperly. Well, the builder didn't know that he had been away and when he got back, he hadn't checked the service, the roofers who had who had done the job, and sure enough, it would have caused a lot of issues in the future, which would have just caused more problems, stress and concern. So luckily, we got that fix right away. Things like that. There's all sorts of things that come up during during, you know, a build, not everything's perfect, even if it's brand new. So hire an inspector Have a look at it before you even walk through it with the builders representatives before your deficiency walkthrough that way you're prepared and you already know. So when you sign off on the deficiency list, you have that as well that inspectors report. So that's also something that you should be aware of. And I want I have talking about 50% new listings, there are a lot of new listings. And I want to mention a few of mine that's brand new in the last few days that actually that that we are looking at offers next week on so we have, I'm going to mention for three specific ones.
Curtis Pope:
I'm going to hold you that till you're only getting four.
Michele Cummins - PREC:
Okay. Sandstone drive, as mentioned before, now this is actually this one is a little over 12,000 square feet, but the other 120 3000 square feet in order go Salmon River area actually that's coming up. That's the next one I mentioned. But this one is a rancher. And it's a full walk out daylight basement that has like a complete suite in it. That's perfect as a family for blended families. There's a blended family in there right now. It is beautiful. They really renovated it and fix it up just gorgeous, a completely private backyard, lots of parking. It's got a gorgeous shed was built in 1991. And, you know, that's just a wonderful dead end streets. And the size of the house is 3300 square feet. And yeah, we do have an open house on Saturday, today, of course to the floor. So have the if you want to have a look just to get through today if you want but also call your realtor set up an appointment. You don't have realtors, you can go ahead and contact me Of course, and then what else match will actually I'll mention that before I go to macro Street in Michigan. So this one is a beautiful 2015 built home, five bedrooms, five bathrooms. It's a cute lot. It's got a carriage house. So not only does it have a main two story house, the basement has a sweep. And then it's got a carriage house above the garage with a great tenant in it who wants to say so that home is priced at 1,375,000. And yet the detached garage, it's a 3000 square foot home. That's gorgeous. Just hit the market. And I believe the open house. We have there is tomorrow it's tomorrow between 12 and two o'clock. So maybe come out and have a look at that one. And the actual one in all Assam rivers coming up next week. It actually hasn't hit the market yet. So that one is a rancher about 1300 square feet gated backyard is huge private. And it's got a major workshop I mean major and talks about like six different doors, the middle doors like a 12 foot high door. This is a huge workshop and you can drive through it through the doors because the other side of the backyard, it's on septic and it's just flat. It's gorgeous. And it's huge carport for like personal buses and boats RVs everything that'd
Curtis Pope:
be a perfect second property for you guys for Richard just are all the cars.
Michele Cummins - PREC:
I know I know Trust me, I know if I can have horses there. You got it. And then another new listing off malar place. I think this is the fourth one. Shoot, I do have more but you know what mallards place in mission. This is also over 23,000 square feet. And it is built in 1981 It's six bedrooms. You've got a couple bathrooms Of course it's a two story split entry really and it's so private and it's on in a cul de sac and it's rain renovated so beautifully. It's priced at 1,360,000. So oh and then my new home construction our row homes. Next week we will be looking at offers we just put up a few on the MLS and their row homes. No strata ledgeview trails adjacent to ledgeview tree farm adjacent to right close by ledgeview country clubs, golf, you can go up your heart's desire and walk and hike your heart's desire gorgeous rowhomes two stories plus fully finished walkout daylight basements. And I'll stop there.
Curtis Pope:
Alright, well I think that's for I lost track too. So
Michele Cummins - PREC:
awesome. Okay. Well, I do have a quote though. For the end of our show. Listen with curiosity, speak with honesty act with integrity. By voy T Bennett.
Curtis Pope:
I like that one.
Michele Cummins - PREC:
Listen with curiosity. Asset integrity.
Curtis Pope:
Yeah, I do like that. All right. Well, people want more information about what you do as a realtor and I get to see some of these lists. seems because we got all whacked for them. Where can they go? We shall come and stop and join us again next week and we will talk real estate in order to unlock your real estate potential on the show real estate is maximized. Thanks for listening
If you missed last weeks episode where Michele and Curtis talk Inflation and Selling Investment Properties, please go back and take a listen - it's well worth it!