‘It’s Too Expensive To Sell’ – “We’ve lived in the West-End for eight years, three years in the place we are in now, but it is so expensive to sell. I looked into it, realtor’s fees.. we’d like to move east but it costs so much to sell.”

“Two women, early 30s, decked out in fitness gear, fast walking. (Turns out they ended up walking into their workplace, a mountain equipment co-op office. This has little to play in the anecdote but sets the lifestyle scene up well.)
They are speaking about moving: “We’ve lived in the west end for eight years, three years in the place we are in now, but it is so expensive to sell your place. I looked into it, realtor’s fees.. we’d like to move east but it costs so much to sell your place.”
I believe it will be much cheaper than the equity lost over short term, no? I imagine falling prices will also keep these sellers off the market but how many people want to be getting out of the market? I seem to overhear RE discussion on the streets I walk more and more often.”

– anecdote from Aldus Huxtable, via e-mail to vreaa, 27 Dec 2012. Aldus also adds “I have been back in van for a few weeks after a few months away. Sentiments have changed.”

We agree with Aldus. The cost of the trade, while very substantial in RE markets, will pale into insignificance compared with the price drops. These ladies weren’t clearly discussing getting out of the market, though; rather, it seems, a lateral move.
It is possible that “it’s too expensive to sell” may become one of the stories that owners who ride the market down will be using to assuaging themselves.
– vreaa

44 responses to “‘It’s Too Expensive To Sell’ – “We’ve lived in the West-End for eight years, three years in the place we are in now, but it is so expensive to sell. I looked into it, realtor’s fees.. we’d like to move east but it costs so much to sell.”

  1. “Too expensive to sell” is code for “we are not as rich as we thought”. It is one of the dawning realizations after years of chicken-feather fluffing about paper gains that you really don’t get to keep it all after all. It is material too in a falling market. For anyone who put 5% down they are probably already underwater. Those pesky realtor fees plus closing costs, staging etc etc must really sting when they become out of pocket expenses. Imagine the indignity of having to borrow a couple % more just to get out of a house that is falling in value! And that is how some people end up trapped. They won’t make the decision until it is too late.

  2. Farmer, are you suggesting that Scotia Bank has been lying to us all this time????!!!

    • Naked Official #9000

      @bailing:

      disharmonious!

      • Still waiting for you to post that bullish quote of mine, Naked Official #9000.

      • Naked Official #9000

        What’s more bullish than mocking the bearish opinions of those you disagree with, loyal cadre?

        Do you remember your first series of posts on here? I do, and it was hilarious..

      • “What’s more bullish than mocking the bearish opinions of those you disagree with, loyal cadre?”

        If I criticize a bear then I must be a bull? LMAO.

        Rational people don’t see the world like that. They weigh arguments based on facts, not partisan position of the speaker. You’re an ideologue. Being a bear is more important to you than being rational.

        It’s now clear to me that you are closed minded, partisan, and dogmatic. I won’t be reading or responding to your comments further, as it’s a waste of time.

      • The Poster Formerly Known As Anonymous

        Naked Official #9000 is a “closed minded, partisan, and dogmatic ideologue”?

        haha you’re in the running for “most astute internet character analysis” of 2013.

      • Naked Official #9000

        @TPFKAA:

        This is honestly making me pee

        @JTS – loyal cadre, carry on! You are the exception to the western imperialist running dog maxim that if you let a fool keep running his mouth, he will eventually stuff his own foot in it!

  3. Cyril Tourneur

    Looks like the bridge builders drank the BPOE cool aid too. “Ice and snow? We shouldn’t have to account for that here in the “California” of Canada!”

  4. “To expensive to sell”???
    ….Is this a trendy code for “Underwater”…
    Wow…
    I can’t wait to use that line on a few people I know… “Thanks”.
    Silver

  5. Can someone explain to me exactly what realtors do to justify such astronomical fees? The paperwork to do the actual transfer of ownership can’t be that complex…. I’d assume that in a competitive market you’d have realtors competing against each other with lower and lower fees.
    Perhaps if there were 10% as many people competing for the same pie, each person could charge only 10% as much and still have the same take home pay.
    If I sell my car privately, I can go to ICBC and get the forms myself.. why isn’t there a similar market of people doing the same and having a notary charge a flat $500 charge for the paperwork?

    • It’s not only about the paperwork. Somebody has to give you the pitch. You may see a small derelict house with low ceilings and moldy walls priced at over a million dollars, but the good realtor will give you a feature sheet and explain that you are buying a cute and cozy livable entry home that is waiting for your creative ideas. The fresh perspective is worth all the money…

    • Dancin, I have bought twice and sold once without a realtor. I have sold twice and bought once with a realtor. From what I can see there is a lot more paperwork when you deal with a realtor. That extra paper work is solely for the purpose of covering the realtors arse. The actual offer and offer acceptance are pretty simple, what, how much, when etc. The first time we bought we did the deal on the sellers kitchen counter. On the next private purchase and the sale we used a notary for the offer and acceptance. If I recall it cost about $80 which was refunded to us when we used the same notary for the closing. It wasn’t really necessary but there is a certain peace of mind to have someone else with more experience has looked it over and as I said it was basically free. From what I can see realtors complicate the process by adding two middle men into the equation. That said in a market like this I would only try to sell by owner for a couple of weeks (just in case the neighbour has always wanted to buy your house) before turning to a realtor. Unfortunately they have a bit of a monopoly on the buyers because the services that they offer the buyers are free.

    • Actually, in the coming (arrived?) type of market is when they start to earn their fee. When homes are selling themselves, you wonder why you need them at all. When you’re really competing with half the homes in the neighborhood, you may need the help.

      All the johnny-come-latelies start to wash out, and the real pros who actually provide a service are the ones which make it through the downturn.

    • let’s see the hidden hand will work it’s magic

  6. A bit off topic, but still relevant to “too much to sell”… I walked by the townhouse complex at 16th and Granville yesterday while going shopping and noticed that all the irrigation had burst along the retaining wall landscaping. There was water spewing out of a couple of bent sprinklers, pipes exposed and water water everywhere. There were two crews attempting to clean and repair (and salt the sidewalks) but it was a big job. My point is, this complex is complete and largely unsold, with no apparent maintenance taking place (the irrigation system should have been drained and flushed with air to prevent such an occurrence). Will the developer just allow his investment to collapse due to price fluctuations or will he bite the bullet, maintain and keep up the units and sell at any price. Or is he on the hook for so much that he can’t afford to sell at the going price without losing a pile of money and so will ride the coaster down.

    • The followup question would be – why is the cost of construction in Vancouver so high? How come that you can get a new house directly from the builder for less than $200k in the US, but in Vancouver it costs $300k just to build a laneway home on your own land? What were the building costs of those townhomes in Shaughnessy?

      • A very, very good question.

      • Labour costs are considerably less. In addition there is a markup for building materials because of smaller-scale supply chains and other transport overhead. You can verify this by looking at contractor price for lumber and fixtures in BC versus say California or Texas.

        Vancouver proper has higher building code requirements, most notably with more expensive foundation requirements. Foundations in other areas (like Richmond) are cheaper.

        I doubt there is a scam going on, there are too many independent builders around to collude in a meaningful way, for SFH anyways.

        The answer, of course, is to pay less for the land. ;)

      • Jesse, the cost of land for a laneway house is zero.
        I wasn’t suggesting a conspiracy, but the cost differences are something to think about. All that other stuff you mentioed matters, but I don’t think it’s enough to explain the cost difference. IMO, to a large degree, the cost is higher simply because people in Vancouver are willing to pay for it. I wouldn’t be surprised if the costs magically decrease once real estate prices go down.

      • bubbly -> Actually, the cost of the land to an owner for a laneway house is considerable: they have to forgo the use of that land for anything else – a carport or garage or vegetable garden or place to sit or privacy buffer or whatever. All the laneway house math has been distorted by people leaving out the value of the land: laneway houses cost ($280K to build + one third of 33x122ft lot ($500K at one point in some parts of the city!)).

      • vreaa, yes, but you are talking about opportunity cost.
        I was comparing $300k for a tiny laneway house (which clearly does NOT include the cost of land) vs $200k for a brand new (and much larger) house in parts of the US (including land).

        If you include the potential cost of land in Vancouver, the math will be way out of whack, but that was not my point.

      • Sure, okay, understood.

      • I think a part is that the code makes construction difficult. If it’s infill there will be additional overhead compared to if it’s built with the main structure. Further if there are infill constraints requiring a different footprint the plans will need to be altered. With standard vanilla builds the plans are pretty much copy-pasted. Add in the west-side “quality” premium (i.e. something that’s not cardboard in 40 years) and I’m getting most of the way there.

        I agree though — I have little doubt these things are being decked out more than they need to be, I could see adding another $50K just in finishing. These things aren’t that old — they were added 2010-2011 — so I expect the builders with more experience are still charging a higher margin. That will settle out in time (no pun intended) as more builders become comfortable with the form and the basic plans become stock.

      • ..something that’s not cardboard in 40 years…

        Why in 40 years? Most houses in Vancouver are cardboard now.

  7. Fraud, gouging, gouging, gouging, fees, transfers, gouging, and three belligerent fat high school dropouts to wave stop signs

  8. Um did anyone notice that condo MLS-HPI has been flat over 5 years now? When can we call it a “soft landing”? :)

    • actually flat for 5 years, wouldn’t this count as a smooth landing with no bumps or dips? :)

    • And for Whistler, condo MLS-HPI over 5 years is down 38.4% – prices would have to go up by 62% to break even. Is that a crash or soft landing?

      • Whistler IIRC includes condo hotels which fell of the rails a few years ago (business model was fatally flawed). After talking to people investing up there, it appears “normal” condos are not down by nearly that much, though I don’t think Whistler has performed as well as Vancouver CMA post-Olympics (somewhat akin to a stock immediately post-dividend).

  9. Too expensive to sell? Meet, “Too expensive to heat.”

    Your ThursdayZen, DearReaders….

    “We’re growing a bit, but not as much as we have done in the past.” – SandringhamRoyalEstate’s HeadGardener Martin Woods

    [UK Telegraph] – Queen turns off heating in greenhouses to save money

    “It costs a fortune to heat greenhouses these days and it’s much cheaper to buy the plants fully-grown because commercial nurseries operate on an enormous scale and can absorb the extra heating costs.”

    The Queen’s privately-owned estate in Norfolk has two greenhouses for carnations and others for crysanthemums and dahlias, but most will be mothballed this year, with only a small heated area retained for houseplants and a few other select specimens.”….

    http://tinyurl.com/bbf64x4

    [NoteToEd: for a brief moment there, I thought Sandringham’s HeadGardener was copping to a failed ‘alternative’ business model for the estate/greenhouses.]

  10. Like the conversations here but please, enough of the…’overheard two people talking in the bathroom stall next to me’ stories written by, ‘loners living rent free in their parents basement.
    Happy New Year!

    • Why should those stories be avoided?
      Stuff like that makes for some of the most remarkable, most candid, accounts. We’ll keep posting them, if they have reasonable face validity.
      And if it’s only the basement loners who are in-tune enough to note, recall and report them, so what? You should be thanking them for reports from the trenches. Are you recommending we all rather stick with ‘The Sun’ (see next post)?

      • UBCghettodweller

        The validity of a statement, if it is indeed true, has nothing to do with the person who makes a statement. Even complete idiots and fools can still tell the truth- Shakespeare used this device extensively.

    • You are mixed up Dave. Plenty of people who come to this site are homeowners. The “basement dweller” tag has little validity and is just one of the insults that the bull camp uses trying to rationalize the difference of opinion they see here while minimizing the arguments presented.

      Plenty of homeowners are indeed very worried about the effects the bubble has wrought on the quality of life in Vancouver, on its business environment, on the impacts it is having on families who cannot afford to live here anymore etcetera, etcetera. Try and stick with the dialogue and save the insults for your Mother in Law.

    • The VREAA submission queue is wide open to receive your wisdom, Dave.

    • Naked Official #9000

      Sweet thought terminating cliche, loyal cadre!

      Carry on with the revolution! It truly is different here in this glorious concessionary zone! This will be as fine a treaty port for the middle kingdom as San francisco and Seattle!

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