Keeping it Real
Meet Jacquie McCarnan your host for Keeping it Real, the Vancouver and area residential real estate podcast that aims to demystify all things real estate in our crazy market.
Jacquie has been a licensed Realtor since 2016 and, in that time, has come across just about every scenario you can think of in our residential market. From hoarder homes to those for sale by owners to crazy strata situations and more, Jacquie provides real stories to help you navigate real estate in Vancouver and surrounding areas.
Each episode of Keeping it Real is short and to the point and provides you with great information about the topic discussed. Jacquie is always available to answer more in-depth questions and is happy to feature your own experience in future episodes.
Episodes also contain additional, non-real estate info about local businesses, experiences, and hidden gems around town that will make you sound like a local expert!
If you live in Vancouver or surrounding areas you know that the #1 thing people talk about is real estate (then the weather) if you want to sound knowledgeable and up to date on the real estate part listen weekly to hear topical issues that affect our market. We try to pick the most interesting and current issues to demystify each week and eagerly anticipate your input.
Join us every week for the very newest info on residential real estate in Vancouver and area.
Keeping it Real
Ep 29 - Was this French Dude Bamboozled? You Be the Judge! The Crazy Story of Jeanne Calment and Raffery
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Could a quarter-point drop in interest rates be your ticket to securing an affordable home in Vancouver? Find out as we unpack the recent decision by the Bank of Canada on July 24, 2024. We'll break down what this rate cut means for both buyers and sellers in Vancouver's near-buyer’s market, especially as the summer selling season heats up. Plus, we shed light on the often-overlooked complexities of purchasing tenanted properties under the latest regulations. And if that’s not enough, we have an exclusive real estate opportunity—a unique 1,425 square foot home in Norgate, North Vancouver, that’s turning heads with its $1.25 price tag!
Was he bamboozled?? You be the judge in this gripping segment. Jacquie delves into the extreme longevity risks associated with the "en viager" real estate system. Using the fascinating case of Jeanne Calment, who lived to be 122 years old, Jacquie highlights how her remarkable lifespan posed a significant financial dilemma for her buyer—a scenario that's eerily mirrored in Norgate. She also share a humorous anecdote about Rafferty and offer tips on making informed real estate decisions. Don't miss this episode full of valuable insights, intriguing stories, and practical resources available on our website to help you navigate the market effectively.
Welcome, welcome, welcome back to Keeping it Real, the Vancouver and area residential real estate podcast that aims to, I guess, keep it real. My name is Jackie McCarnan and I am your host for Keeping it Real. I am a North Shore realtor and I created Keeping it Real just to help people navigate through all of the things happening in our real estate market. It's hard to help people navigate through all of the things happening in our real estate market. It's hard to keep track of. There are new rules all the time. Interest rates have a huge effect, like they did this week. You know there's lots to know and lots to keep track of and lots of different opinions out there. So this podcast was created to kind of give you the facts and let you form your own opinions. Every week on Keeping it Real, I throw in a disclaimer to keep my managing broker happy and hopefully keep me from getting in trouble with my board. So anything you hear on the podcast is my opinion, coupled with my experience and the research I've done on the topic. All right, now that we've gotten all that stuff out of the way, this week I'm going to talk to you about. Well, obviously we're going to have a conversation about the interest rates, because we just dropped another quarter point here, and I'm also going to talk to you about life tendencies, which is pretty crazy to think about, but you'll see why when you listen in. So let's go. You'll see why when you listen in, so let's go.
Speaker 1:All right, so it is Thursday, the 25th of July 2024, which means that yesterday, on the 24th, the Bank of Canada dropped the mortgage or interest rate 0.25%, so a quarter point or I don't know how they say it, those guys. But keeping in mind, when you hear me talk about all this stuff, I am not a mortgage broker, nor am I a finance person, but I am somebody who works in real estate. So this is a really important thing that happens for us. When the interest rates go up or down, it has an enormous effect on our market. Back in when was it May, when they dropped the rates by a quarter point for the first time in a couple of years, everybody was really excited and anticipating that that would have a massive effect on buyers and that all the stuff sitting on the market or all the buyers who were waiting would immediately jump in and start buying up property. And that didn't happen. But what did happen was that everybody who was thinking about selling their home sat on it until after that that announcement and then listed their home.
Speaker 1:So now we find ourselves in I mean, technically we're in a balanced market, which means that we have, that we're selling through our inventory, but really it's very close to a buyer's market, which means we have more inventory than buyers. Those are the very simplest terms. I can bore you with statistics if you prefer. Sometimes I like to do that and I'll probably put an article on the North End home sales website just to explain that a little bit further. But essentially what happened was all the buyers are thinking we're not sure if this interest rate drop is going to hold, and all the sellers were like, yeah, the interest rates are coming down, we're going to sell.
Speaker 1:So what we're finding, or what we have been finding in the last couple of months, is that not very much is selling. That could also be due to the summer. Things don't sell very well in the summer, as most people know. There's a cycle in real estate here in Vancouver but and probably elsewhere too. But essentially what's happened is we are currently looking at a very slow selling cycle, and that's certainly been my experience, and it's been the experience of many other agents here on the shore, and the numbers bear that out. What does that mean to you? If you're a seller, I would suggest that now is not the greatest time to list your home, but in a month it might be, or we have to see what happens after this rate drop.
Speaker 1:And if you're a buyer, I think that with the new rate you are in a really great position to pick up a property that maybe has been sitting on the market for a while. But you got to be careful because, like we talked about last week, buying a tenanted property is going to be considerably more difficult. And we can review this very quickly. Let's say you're buying your first place and you get pre-approved for mortgage at the current rate, but then the place that you love has a tenant in it. The seller has to give the tenant notice, but now the notice is four months, which means that your rate hold that you have on your mortgage pre-approval doesn't last through that. So you're going to have to get re-approved before the completion of your home sale. Now, as rates are trending down, I guess I don't know if we call two points a trend, two times a trend, but as rates go down, it's not super scary to risk that and buy a tenanted property. So you need to make sure that you're working with a realtor who understands exactly what you want to do. If you want to move into the place, you need to be able to find something that either is a little bit less than you're expecting to spend, so that you guarantee that you're going to get approved for the mortgage, or find an untenanted property.
Speaker 1:But that's all I'm really going to say on this topic, on this particular podcast. If you want to talk more about this, just give me a call. Always happy to do that. This week, what I want to talk about is something really interesting that so many people don't know about. But first I'm going to say did you know that you can buy a house in North Vancouver for $1.25? Not a float home, not something up Indian Arm, not a double wide at the Capilano Trailer Park. Nope, this home is a 1,425 square foot home right in Norgate. It's four bedrooms, two bathrooms and it's on a 7,000 square foot lot.
Speaker 1:So what's the catch? Jack and yep, there's the catch, for sure. The catch is and I know this because I called these guys ages ago because this place has been on the market for 427 days. The catch is that the fella that lives in the home the owner current owner. He wants to sell the house, get the money and live in the home rent-free for the rest of his life Life tenancy. And it's a great idea for seniors who want to stay in the home that they've lived in for 40 years but also want to free up some equity that they've lived in for 40 years but also want to free up some equity. So it's kind of an alternative to a reverse mortgage or alternative to a HELOC home equity line of credit.
Speaker 1:But it is not without its risks, which brings me to the story of Jean Higgins Calment. Way back in 1965, before even I was born, a nine-year-old woman named Jean-Jean Calment sold her apartment in Paris. The terms of the sale meant that she could remain in the apartment and receive a monthly income of 2,500 francs from the purchaser until her death. So instead of a lump sum payment, the agreement was that the purchaser the buyer would pay her a monthly payment. It sounded like probably a really great deal to the buyer because Jean was 90. Upon her death, the property would then go to the buyer.
Speaker 1:30 years later the buyer died, but Jean was still alive, at the age of 120. And she continued to receive the income from the purchaser's family until she died a couple of years later. So yeah, that's pretty risky. I mean, that obviously is a super extreme case, like who lives to 122? And I think she might be documented as one of the oldest people to live. I don't know. Anyway, that's not part of this story, but the point is that it's pretty risky.
Speaker 1:The risk for somebody buying this home in Norgate is that the seller has agreed to pay, would like to pay part of the maintenance and part of the taxes and all the expenses that come with owning a home, but not pay rent. So whoever whoever buys this piece of property would be holding a mortgage with no rental income to support it. So obviously it has to be somebody with very deep pockets, somebody who can afford to service that mortgage for the lifespan of the fellow that lives there. As I'm sure you can imagine, this rules out a really big whack of the market. Like 99.9% of the buyers are not able to afford this, and so that is why it has been on the market, for actually I just went back and took a look, 2180 days, which you know is quite a long time, like six years.
Speaker 1:So several years ago when I had a buyer ask me about this house, I inquired and it was really cute. The lovely agent that is selling it and has been on the has been the seller's agent for the entire time. She was saying how the owner would provide health records because he's not in great health, which I guess makes sense. But I mean, this is a tough sell right, especially because at 1.250. Now it is not that far off of the next home in Norgate, which is 1.5. And homes in Norgate have been selling for under 1.5. So that 1.25 price tag is probably going to be a.
Speaker 1:If the seller of this home was more interested in a monthly stipend, it might be an easier sell right? Say, four or five thousand dollars a month to this guy, um, so that he can, you know, get his money, get some money and um signs over the property, then that's a much better deal for the buyer. Um, unless the buyer is andre francois rafferty, the guy that bought jeanment's apartment, and I want to tell you a little bit more about that story because it's pretty interesting. It wasn't, and is still not, an unusual practice in France to buy a house en viagre Forgive my French accent, maybe it's Latin, anyway, it means for life. So you find an elderly person who doesn't have any dependents or relatives that they would be leaving something to, and you purchase their home through a monthly income. And that is a really good deal for both parties, because the elderly person gets a nice big chunk of money while they're alive, or like gets monthly money while they're alive so that they can enjoy their life more, and the buyer gets to own the house free and clear upon their death. Sounds like a great deal, but, as I said, in this case it was not a great deal because the seller or the woman living in the apartment outlived the buyer by a couple of years. I should note here that the apartment was not in Paris, it was in Arles, france. So I just wanted to make that clarification in case anybody is fact-checking my podcasts, which I doubt.
Speaker 1:So the notary public, rafferty. He thinks he has found the sweetest deal. He meets this 90-year-old woman she is, you know, elderly, obviously, and she has a sweet little apartment and he offers her 2,500 francs a month, which is equivalent to just around 700 US dollars right now for her two-bedroom apartment and she'll get to live there and get this 2,500 francs a month, and upon her death he'll get the apartment free and clear. Sounds like a smoking deal. Great for both parties. Obviously, as mentioned, the problem was that this poor guy, he didn't realize that he was buying an apartment from someone who would go on to become one of the oldest living people.
Speaker 1:And she was super interesting. She was interviewed in the 90s and she was born in 1875. So during the interview she was telling her story. She was born in 1875, and she had a life that seemed to defy our general sense of historical periods. When she was a teenager, she allegedly sold colored pencils to Vincent van Gogh, and then she lived to see the fall of the Berlin Wall and the rise of the World Wide Web. Can you imagine?
Speaker 1:She died on August 4th 1997, when she was 122 years and 164 days old, and, as far as we know, no human has ever lived as long. Poor Rafferty. By all accounts, she lived a great life, but she outlived her husband, her daughter and her grandson, but she was super healthy too. And in one interview she claimed I've never her daughter and her grandson, but she was super healthy too. And in one interview she claimed I've never been ill and never ever.
Speaker 1:She rode a bicycle up until her 100th birthday, savoring one Dunhill cigarette each evening after dinner, as a centenarian, and a neurologist examined her at the age of 118 and found that she had the mental acuity of an 80-year-old. Like, I don't know, was she sent by aliens? Maybe Now, because Jean lived so long, andré-francois Rafferty, the notary public. He ended up paying her double the value of the apartment before he died in 1995. And he was only 77 when he died. So he obviously was not getting any kind of longevity tips from Jean deal or a bad risk to you know, buy, make this arrangement with a 90 year old, because people didn't live that long then. But I think as we are starting to move into a period of time when people are much more concerned with their health and much more interested in living longer and doing things to stave off aging, this is going to become more and more difficult to pull off. 90 might just be the new 80 or even 75. I wonder how Rafferty felt if he knew he was dying and how he felt when he was dying about the bad deal he'd made. Basically, he just paid some old lady. He didn't know a monthly income and received no benefit from it whatsoever. One can assume that I don't know for sure, but one can assume that he had heirs of his own and I'm sure that the apartment would have eventually passed to them so they would have benefited from his deal, but he certainly did not.
Speaker 1:I remember a couple of years ago too, hearing about a story of somebody in Scarborough buying a home that had a life tenancy and the tenant outlived the purchaser as well. But I can't find any information about it online because I can't remember enough of the details. So if you remember what that one was, please let me know. I'd be it does to do the entire sale of the home just for the fact that the buyer would have to service that huge debt with no income to support it, obviously. I mean, maybe somebody who wins the lottery might want to do that. That'd be good. Maybe he should start calling up lottery winners and saying, hey, do you want a piece of property that's going to be worth a lot more after I die? That might work, who knows. Anyway, I hope you enjoyed this story. I'm always interested in interesting stories about real estate from all over the place. So if you ever hear of one or think that one might be good for the podcast, let me know.
Speaker 1:And if you have been waiting to sell your home, maybe just give it another couple of weeks. Let's see what happens with the market. Now that we've had the second round of interest rate drops, let's see what happens. But if you're a buyer, I would giddy up, get pre-approved for your mortgage and get looking, because who knows what's going to happen. But I think with rate drops we often see an increase in price. That's what's happened in the past. Might not happen this time.
Speaker 1:There are lots of other factors at play here that I talked about in last week's episode. So you know, just keep an eye on things, keep listening to the podcast. Hopefully I'll be able to give you guys some information that will help you make the right decision and you won't be left like Rafferty laying on his deathbed thinking my God, that woman drove me crazy my entire life. Have a wonderful weekend. I will see you next week. Thanks so much for tuning in to Keeping it Real. You can get this podcast everywhere you get your podcasts or at northvanhomesalescom slash podcast, where you can also access things like my buyer's guide and seller's guide, which I'm going to update to include buying tenanted properties or selling tenanted properties. So keep a lookout for all that. See you next week.
