“The unit at # 205 28 POWELL ST, MLS listing V917709, was listed on Craigslist as being for rentfor $1,800 a month (I think they’ve managed to rent it out now as MLS lists it as “Tenanted”). Here is the e-mail one would receive back upon contacting the rental agent:
“Full Disclosure: I am a rental agent acting on behalf of the owner, no fees will be charged to you. The owner has the property listed for sale. It has currently been on the market for 13 months with no buyers. The owners due to circumstances are not able to come down on the price and the unit will likely remain on sale. The realator will meet with you after you move in to discuss how you would like to handle any showings (there have been 6 in the last year). We will offer any renters a month to month contract. In the event of a sale you will be given two months notice, as well as the standard one month of free rent (If you are in the unit or not). The owners will also pay for movers and moving related expenses (move in fee etc..) to help make your transition easier.”
$488,000, listed for 13 months, unable to come down in price at all due to “circumstances”. A mortgage on that unit, 5% for 25 years, would cost just under $3,000 a month, before strata and taxes and all that.
Or you could rent it for $1,800 from the sucker who owns it….”
- data junkie at VREAA 22 Feb 2012 11:43am
—
Obliquely related:
“At the top in the UK, people clung on, telling themselves they didn’t have to sell & kept the prices high. There are documented cases where people REALLY didn’t have to sell (retirement, etc) and in those cases, houses stay on the market for 2 years ++. There are also well-known cases where the sellers have had to drop big-time. I’ve got my eye on a couple of places on the North Shore in YVR and I’m amused (as a current non-participant, but future possible) to see that real estate guys in YVR are no different from the UK, i.e. some of the prices have been quietly dropped by 5-10% in recent weeks with no great fanfare.
Next step? Watch out for the “independently valued at CDN$900,000, a steal at only $750,000″ headlines on the websites, etc… and so it begins…”
- Craig Sterling at VREAA 23 Feb 2012 12:46pm
” 5% for 25 years”
Try 2.75%. Money is free, remember?
https://www.comsavings.com/Personal/ProductsAndServices/Borrowing/Mortgages/Promotion/FeaturedRates/
http://www.valueland.ca/english/index.html
Or 2.49% for a 1-year at valueland, yay, free money, gimme gimme gimme!
I don’t know if history will repeat. If it does I can offer some advice about what to buy on the West side in a few more years……Back in the early eighties I think, housing prices in Vancouver had really been knocked back.
Historically high interest rates were killing property values. Banks would not lend without good collateral and proof of income and a solid job. Forget it if you were only employed for six months or a year seasonal. Go away if you had no savings to speak of. Don’t even apply if you are young and have no co-signer.
So what happened? Vendor financing is what happened. It will be coming back again too. Big time. When banks tightened hard on credit the volume of sales fell hard. Everything and everyone looked risky then. These private deals stepped into the fold. They are deals offered to buyers outside of the banking system. It is private lending that only property owners with plenty of equity can offer as a rule.
And the guys who offered these deals were almost all retirees who actually needed to sell for one reason or another. The houses that came on the market then were generally paid off homes and done as private sales between buyer and seller. The homeowner was the bank.
Few people recognized the opportunity at the time but those who did buy and now own homes in Kits, Point Grey, Kerrisdale and UBC ended up millionaires in todays dollars. In many cases, multi millionaires.
You just have to know when to seize he moment. Vancouver was never a cheap city. It has had its great opportunity moments though and another may soon be coming.
US banks are secured by the asset, so it was in their interest to leave a house vacant and keep values artificially buoyed. But in Canada the bank is insured, the asset is in limbo, and the borrower can be pursued for recourse. I can’t remember, does Canada have a lot of real estate auctions during the down?
Yes, lease to own during high interest market bottom, and when mortgage brokers compete for rates, lock in low and ride the wave up.
Lease to own and rent to own are a little different. Those usually involve rental payments that are later applied as a down payment against the property. In those cases, owners still expect buyers to get conventional mortgages.
The deals I recall though were what they termed “vendor take-back mortgages”. In every way they were mortgages like a bank would issue with the exception that you could often buy with no down payment at all. The owner himself was financing for the the deal for the term based on his high equity level. A lot of trust was involved but like any contract it had teeth.
An interest rate was agreed upon and payments were arranged over a specified period. If you screwed up and did not pay the owner could seize the home as his collateral against the debt. Just like any other mortgage.
Usually they did not do so though. What they really needed was the revenue and a confirmed contract of sale that they could then borrow against for retirement purposes.
I believe we will see many thousands of these in the future if there is a contraction in credit and a simultaneous housing bust (they usually go together) and that there is also a coincidence of a large number of retirements.
FSBO and vendor take backs could well be the future.
Unit #205 was sold at least twice before.
At the current asking price of $488K [$474/sqft], he’ll be lucky to get what he asks. On the other hand, he misses the boat when his neighbors sold for more than what he is asking now.
#201
[2009-04-24]
AP: $373,500 [$464/sqft]
#201
V873991 [Sold 2011 - listed 2011-Mar-08]
AP: $449,000 [$558/sqft]
reduced: $429,000 [$533/sqft]
#204
V780842 [sold; listed Oct 8, 2009]
$399K [$551/sqft]
#401
V655366 [sold; posted 2007-07-16]
$419,900 [$524/sqft]
#401
V766760 [sold 2009]
$479,900 [$599/sqft]
#401
V797764 [sold ]
$479,900 [$599/sqft]
#403
[sold 2007 for askig $363K]
$363K [$463/sqft]
#405
V760838 [Sold on June 8, 2009 ]
$455K [$476/sqft]
#605
V671280 [sold; posted 2007-10-12]
$889K [$544/sqft]
currently for sale -
V837120 [Posted: 2010-02-11]
$998K [$611/sqft]