Canablog

So we keep an eye on the housing websites. Similar to the NVM/Funda website in The Netherlands they have MLS. Ge-an prefers this site, I like Realtylink more, they are both very primitive compared to Funda. I would love to get my hands on the raw data and build something more useful.

Anyway, we saw a house that whas in a nice location, three bedrooms and relatively cheap. It being so cheap whe had our reservations, there must be soemthing wrong.

We went over and had a look, it was very nice.. We could see us living there for quite a while. But the realtor was very pushy.

There are some differences how things work here compared to The Netherlands. A realtor can have both the Buyer-Realtor and Seller-Realtor at the same time (if the seller is OK with that).
Also, all realtor related costs are payed by the seller. That means that if one realtor does both sides the gets payed twice, and the seller can normally negotiate a somewhat lower rate with the realtor, so both parties are interested in somebody who is willing to use the same realtor..

When we looked at the house we where basically given a deadline of 19:00 that day (it was 16:00 when we looked at the house). They had another offer from somebody, but from an other realtor. If the own realtor has a customer, they have preference over the other customer. So she clearly was interested in selling it to us for the reason describe above.

But we had no intention of being rushed into a purchase of this size :-)

She called us the next day that the other buyer was unable to arrange financing so we still had a shot. The problems raising financing was the same the same reason she had given why the house had not sold yet (2 weeks on the market, 6 offers). We did not know what to believe, it sounded a bit strange.

One of the previous buyers had been very close to making the deal, but had at the last minute not been able to raise financing. For him a layer had reviewed all the documents.
The realtor arranged a call with the lawyer to explain to us what he had found. That conversation was extremely helpful.

In Canada most appartments/townhouse are part of a larger development. All owner of a part of a development are member of a so called strata (similar to the "Vereninging van Eigenaren)"). Before the strata came into existence the normal construction whas that of a "undivided interest". The big difference between undivided interest and a strata is that in a strata all the units are measured exactly aand you are given ownership title to exactly that piece of space (ie you realy the space of the unit). In undivided interest everything is owned by everybody. So your unit is owned by all other people as well (and other people's units are owned by you).

Banks don't like this undivided interest construction and won't provide financing unless you can either do a large downpayment OR take additional coverage for the risk the bank sees. As a result it's harded to arrange financing, and the price of these units are quite a bit lower then a comparable unit in a strata.

That suddenly made things a whole lot clearer. There was nothing really wrong with the unit. It was just the banks with their normal (risk adverse) nature.

Our last house-buying-selling experience was not a good one, so we are a bit careful. If the banks change there mind a bit more in a few years and will not provide financing at all for undivided interest, we would end up with a worthless house. Not a risk we want to take.

We now decided that we:

• Keep saving until we can afford a slightly more expensive house
  
• Will try to stay in Lynn Valley
  
• Will not again bother with undivided interest house