Blog by Therese Reinsch

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Pre-sale condos in Vancouver

I recently sold two pre-sale condos in Vancouver, One Burrard Place and The Arc. Both were 2 bedroom condos which will be completed by 2017 and 2019 respectively. As well, I am on the hunt for a condo in Mount Pleasant, an exceedingly difficult task. It is common for Buyers to snap up condos in their pre-sale incarnation and then assign them with a serious up lift. So, for instance a condo with a pre-sale price of $320,000 might ask $428,000 when sold on assignment.  Recently some of the developers are limiting this activity, or restricting this to an assignment of the Contract to family members. And, there is a 1.5% to 2% assignment fee payable to the developers. Still, a very nice profit for the individual who might have taken a seat in a lineup outside the presentation centre to be the first one in.

My client tells me that he is in for the long haul, perhaps 10 years. With the rents begin so high and occupance rates so low, he should be able to cover his investment. A 2 bedroom condo in Vancouver, Yaletown for instance, can fetch $3400 a month in rent.

With the market as it is today, another interesting fact that many of the public might not be aware of is the relationship between assessed value and market value, remembering that the 2015 assessments represents the market before July 2015, and not what has happened since. For example, a home in my area is listed at $5,180,000 and the assessment is $3,914,000. I think that this is where many homeowners get confused about the selling price of their home, when not on MLS, but when they respond to the knock on their door for the fifth time. If the offer is over assessed value they might still not be getting market value.  Therein lies the problem with shadow flipping. But once the Contract has been signed, there is little anyone can do to alter the situation.  I, myself, have fielded many calls and visits to my home by persons who say they want to buy my home.  It is because the market is so hot, there are so few listings and so many Buyers. My advice is to consult a realtor whom you trust. The commission you might be paying is much less than leaving hundreds of thousands of dollars on the table.