There has been quite a debate around the "St. John's real estate water cooler" in recent weeks. Towards the end of 2007 some local builders and subdivisions in St. John's implemented a new "Economic Clause" to their contracts. Buyers have been noted to shy away from certain subdivisions and proceed to others that do not insert this clause. The debate is over whether this clause protects the buyer or the builder. Does it protect the buyer from an increase in purchase price of the house? Does it allow the builder the option to raise the price of the house prior to starting construction?
The clause states:
"This Agreement of Purchase and Sale is subject to the Vendor confirming to the Purchaser or the Purchaser's Agent in writing the final sale price on or before the expiry of 14 days prior to excavation of the dwelling. If no written confirmation of the final sale price is issued by the Vendor on or before the expiry of 14 days prior to excavation of the dwelling the Purchase Price referenced herein before shall be deemed to be the final sale price. If written notification of an increase in the final sale price is issued with which the Purchaser is not satisfied then this Agreement of Purchase and Sale shall be void and of no effect. Upon receipt of the written notice of the increased final sale price from the Vendor the Purchaser must acknowledge in writing within 72 hours their agreement with the increase in price, and failure to do so renders this Agreement of Purchase and Sale void and of no effect with the Vendor returning the Purchasers Deposit or down payment."
What are your thoughts on this clause? Are you in favor of the builder being protected or the buyer?
- MLS® sales surged 43 per cent to a record 1,326 units compared to last year’s fourth quarter sales of 926 units
- October, November and December MLS® sales were 475, 497 and 354, respectively
- Fourth quarter average MLS® residential house price jumped 11.4 per cent to a record $153,196 compared to $137,478 during the
fourth quarter of 2006
The outlook for Newfoundland Real Estate for 2008 will be positively supported by a strong provincial economy, with the average MLS® price forecast to increase 6.4% to $157,500. REMAX is suggesting a 12% increase which would put the average price around the $170,000 mark. The expected increase in single detached and two apartment homes can be seen already, and it's very early in the new year.
Currently we are experiencing low housing inventory and a high number of buyers. Now is the right time to sell your house for maximum value.
I recently read a review of average St. John's House prices from 2002 - 2008 (forecasted) from CMHC. Good to see the St. John's real estate market on the rise in recent years.
2002 - $113,081 2003 - $119,822 2004 - $131,499
2005 - $141,167 2006 - $139,542 2007 - $148,000
And forcasted for 2008 - $157,500
Want to keep up with the latest market news and trends in St. John's?
We invite you to visit our St. John's Real Estate Blog.
Fraser and Stephen Winters are consistent Top Producers with RE/MAX. We invite you to contact us with any of your St. John's real estate needs and questions. We're never to busy for your referrals!
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