Risky buying strategies to be covered in forum
With Metro Vancouver home prices far outpacing local incomes, some residents have considered or used creative, complicated, and in some respects riskier buying options to get a foothold on the property ladder.
Some buyers are purchasing with friends and family using shared equity models, while others are looking at pre-sales, lock-off suites and rent-to-own homes, or gambling on downtrodden ’hoods.
Ask a guy like Bob de Wit, CEO of the Greater Vancouver Home Builders’ Association, about buying strategies like these and he’ll be quick to say he’s not an expert. But he does have some advice for buyers considering them: get informed first.
The association is holding a homebuyer forum Wednesday evening at SFU Harbour Centre aimed at helping potential buyers do just that, de Wit said.
“The idea of the seminar is to introduce (such concepts) to people so they know what they don’t know — and to know where to get the information they need to take advantage of some of these new innovations,” he said.
RBC’s annual home ownership poll, conducted by Ipsos Reid, in 2016 measured interest among younger millennials in buying homes with family or friends at 24 per cent.
About three per cent said they’d even consider buying with a stranger.
When asked whether shared equity purchases may be more prone to eventually land buyers in court, de Wit cautioned that they did need to be set up correctly. “It really works best when parties already know each other and trust each other.”
The idea of a rent-to-own housing program appeared in former Premier Christy Clark’s June 2017 throne speech, and while voters removed her from office soon after, the rent-to-own concept has stuck around.
The general idea is simple — a portion of the rent payed by a tenant is held by the homeowner toward the eventual purchase of their unit. In practice it’s more complicated and rent-toowners need to be very clear what they’re signing up for.
For example, the buyer needs to know whether the agreement is assignable — that is, whether it can be transferred to another party. Usually they are, but that needs to be mutually agreed on, de With said. “That’s the kind of details we’re going to cover … what does a contract look like that enables those kind of agreements?”
This year’s forum is the 24th held by the association and some of the advice has changed over time, de Wit said. But other advice has not.
Buying as much land as you can in certain up-and-coming neighbourhoods is one of those constants, de Wit said. And if you can’t afford to buy land, look for condos near transit hubs and educational institutions.
Those whose housing need is not acute may be thinking about purchasing a presale condo. Yet a recent story about a New Westminster developer asking buyers for extra cash to cover millions in cost overruns illustrated some of the risks.
De Wit said he thought that sort of thing was going to become more common with rising construction costs and taxes, and something the seminar experts may be able to tackle. The forum is free and can also be viewed online.