General Bob Rees 20 Jun

Some great info from our partners at RECA!

 

Calgary, Alberta — The Real Estate Council of Alberta (RECA) is advising consumers to evaluate the risks of condition-free offers to purchase property.

 

Currently, Alberta’s real estate market is extremely competitive, with limited supply of homes for sale, meaning sellers often receive multiple offers. Home buyers may feel they need to tailor their offer to appeal to the home seller and may consider making a condition-free offer to stand out from other buyers. RECA is advising consumers that this home buying strategy has risks.

 

Most offers to purchase a home are conditional, meaning they have criteria that must be met before the property purchase can be completed. These criteria must be written into the offer to purchase, with an exact explanation of how the condition will be met, and the timeframe for when the condition must be met. If the buyer does not waive conditions by the agreed upon deadline, an offer to purchase becomes void.

 

A condition can be anything the buyer and seller agree to, as long as it is written in the signed offer to purchase. Typical conditions include conditions for a buyer to:
  • secure financing
  • complete a home inspection to their satisfaction
  • review condominium documents to their satisfaction
  • finalize the sale of their current property
Conditional offers allow buyers and their licensees to perform due diligence research on a property, such as getting a home inspection and properly reviewing all relevant information such as the title or condominium documents. Conditional offers also allow buyers to secure financing for the property, typically through a mortgage.

 

Consumers should be aware that a mortgage pre-approval is not a guarantee they will obtain financing. Mortgage pre-approval is only tentative approval based on the buyer’s basic financial information. It is also important to note that at the pre-approval stage, the property is not yet known. Property type, location, or value can impact the financing available.

 

For any reason, including not securing financing, if a home buyer fails to complete the purchase as stated, they may forfeit their deposit and could face legal action by the seller.

 

Consumers are urged to discuss any plans to make a condition-free offer with their real estate licensee. Home buyers should also be sure to speak to their mortgage broker about the financing implications of submitting a condition-free offer. RECA licensees must advise their clients about the risks and possible implications of condition-free offers.

 

For more information on condition-free purchase offers, please visit reca.ca
The Real Estate Council of Alberta is the independent governing authority that sets, regulates, and enforces standards for residential real estate, commercial real estate, property management, condominium management, and mortgage brokerage licensees under Alberta’s Real Estate Act.

RECA’s mandate is to protect consumers, to provide services to facilitate the business of licensees, and to protect against, investigate, detect, and suppress fraud as it relates to the business of licensees.

 

 

 

 
 

Residential Mortgage Commentary – Canadians are getting richer

General Bob Rees 20 Jun

First National Financial LP

 

June 17, 2024

It appears the advertising slogan is true.  Canadians may well be richer than they think.

A recent survey by Statistics Canada shows that household net worth in this country rose to a record high of nearly $17 trillion in the first quarter of this year. That is a 3.3%, or $548 billion, increase over the fourth quarter of 2023 and is the second quarterly increase in a row.

The growth was fed by a 3.6% quarter-over-quarter rise in financial assets and a 2.6% increase in the value of residential real estate.

StatsCan says 90% of all net worth is held by homeowners.

Along with the gains in assets, Canadian households have also diminished their liabilities.

High interest rates have dramatically reduced borrowing, which grew by just 0.3% in Q1.  That combined with income growth that outpaced debt growth saw the household debt-to-income ratio drop to 176%.  That is still high, but it is the fourth consecutive decline in the debt-to-income ratio and it is a notable reduction from the 178% posted in Q4 of 2023.

Canadians are also saving more.  The household saving rate rose to 6.9% in Q1, its highest level in two years.  Canadians tended to put their savings into mutual funds and ETFs.  They parked $23.8 billion in these investments in Q1, more than in all of 2023.