“Friends of ours just sold their home in West Vancouver for $1.55M. The new owners took possession and within a week it was back on the market for $1.7M. Seems the new owners haven’t sold their old property in Ambleside yet, so now are trying to sell any of the two properties. Just can’t feel any sympathy for anyone who does not put a clause in their purchase deal “subject to sale of property”. This just smacks of over optimism in a frothy market.” – DM at VREAA 17 July 9:47am
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- “He’s sold all his properties except his current one, which is now for sale. He explained that the market’s currently in crash mode, worst that he’s ever seen.”
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- “She said the market was dead in Victoria and that it would remain so for a very long time. I asked how she knew. Her answer was fascinating and should scare the pants off the real estate crowd.”
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- “A beautiful Belfast home, in the equivalent of 1st Shaughnessy, bought at their RE peak in 2007 for £3.5 million, has now sold for £800K, almost 80%-off. The market didn’t suffer any significant economic shocks. Rates & unemployment didn’t skyrocket. They didn’t build more land. Sentiment just changed and the prices fell and fell.”
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- “Vancouver is an urban resort whose value mostly resides in its real estate and not much else.”
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- I’m only 50 and I can just about retire if I want to, all because of a single simple decision – “When prices rebounded to their former highs, then rocketed another 30% higher to what I considered to be totally unsustainable levels, I decided that only a fool would pass up a second opportunity to harvest such a massive non-taxable capital gain, and in 2011 I sold my place.”
- The Vacant Lot of Versailles, Richmond.
- “I don’t think that most people think things are going to crash, just that there is going to be a slight correction, but it was amazing to me how sentiment has changed, and the fact Vancouver RE is too high was just understood.”
- “The ‘investor’ who purchased our house put it up for sale two months later, in January 1981, but the bubble had burst.”
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Seems like an excellent situation for a low ball
Lets see they paid 2% Transfer tax when they bought and when they sell will probably pay $30K in realtor and legal fees.
So they have to sell for $1.61 to break even, not counting carrying costs, utilities, taxes etc. Not much room for bargaining there.
Remarkable that they find themselves in a pinch, but still try to jump the price by 150K over their very recent purchase price.
As fish says, perhaps they are simply trying to cover costs.
It’s expensive to trade houses.
Silly.. If they relist at such an exhorbitant profit any buyers in the market will steer clear as they will know its recent sales history. If that’s their pricing strategy no wonder the other house hasn’t sold.
That’s stupid – the house then wouldn’t be considered as primary residence and they’ll have to pay a lot of tax on any profit they may make. I wonder how true this story is…
they’ll pay roughly 30K max in capital gains tax, nearly 30K in property transfer tax and probably 30K in realtor fees leaving about $60K profit assuming cash financing and a successful sale at 1.7M. If they are using mortgage financing, then there will be some interest costs. This is a possible flip in a hot market but it carries a lot of risk if the market stalls. Their downside is 80K over the next two months and increasing the longer the house sits on the market. Is it a smart trade to target $60K risking $80K even in a hot market? No. If it works out for them – chalk this up to luck with stupid money.
Jim -> This technique hasn’t scared the next buyers elsewhere in Vancouver. See many recent examples in Richmond (before the tsunami) and the Westside.
Fang -> It seems they are not flipping for profit, but to get out of a situation where they unintentionally own two houses and can’t carry them.
Update: I made a mistake. My friend the previous owner said it was relisted at $1.8M and dropped to $1.7M. It’s now been on the market with an open house every weekend for a month. No offers.
Fang: there are a number of houses in the area I live in that have been sold and relisted in less than a year. Some are brand new and have never been lived in. Crazy, but true.