Purchasing My Home
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Buying a home is the largest investment most of us ever become involved in. Yet people sometimes take less time over it than they do when buying a new car. That’s because it’s unfamiliar territory to many of us. We don’t know what questions to ask. We may take things for granted, rely on others when we shouldn’t, and sometimes we later wish we had known more about the process involved.
The Real Estate Council of British Columbia feels it is important for you to understand the procedures normally involved in the purchase of a home, to recognize the significance of the documents you will encounter, and to understand the role of other people who may be involved in the transaction. Buying a home is a major event. This information will help you better understand the entire process.
Although the Real Estate Council of British Columbia believes that the following information is reliable, this cannot be assured. The Real Estate Council assumes no liability for any errors in the material or any reliance placed therein. Professional advisors should be consulted before acting upon this information.
- What are my housing needs?
- What are the choices?
- What can I afford to spend?
Types of Housing Structures :
To meet the many kinds of needs that people have, a number of different housing styles and types of ownership have developed over the years. Your individual requirements and your income level will govern the housing type which is most suitable for you at the present time.
Types of Housing Ownership
The Closing Costs
- home inspection fees
- moving expenses
- deposits required by utility companies
- household goods:
- kitchen appliances,
- garden equipment,
- garbage cans, tools, window coverings, etc.
- redecorating or renovations
- Rural? Small town? Suburban? City?
- What facilities are available: shopping centres? places of worship? recreational facilities? hospitals? schools?
- Are property taxes comparable to those in other communities?
- Are there any future developments planned which you may not like?
- Are the sewage and water systems adequate?
- What is the availability and cost of utilities: electricity? gas? water?
- What public services are provided: police? fire protection? ambulance? garbage collection? mail delivery? snow removal?
- Is there nearby public transportation available?
- Do you mind a long commute to work or to visit friends?
- Can you afford to drive to and park at your workplace?
- Will another car be needed for your partner to drive to work, to shop, or take children to school or other activities?
- Are major roads easily accessible?
- Is public and private property maintained to your satisfaction?
- What is the composition of families living nearby: quiet, mature people? teenagers? potential playmates for children?
- Are their incomes and lifestyles compatible with yours?
- Have home values risen, fallen, or remained stable in the recent past?
- Are there any known projects on the horizon which could substantially change the quality of the lifestyle or the home prices in the area? Do you feel comfortable with the current zoning regulations? Will they protect home values yet still allow you to use a dwelling in the way you envision: outdoor basketball hoops and barbecues? storing your boat? a home-based business? keeping chickens/rabbits/horses? cutting trees? high fences? a basement suite? etc. When you walk up and down the streets of the neighbourhood, can you picture yourself living there for several years into the future? Do you understand the effect of the registered bylaws of a strata corporation? For example, do the bylaws restrict your right to rent the property or prohibit pets? Could the bylaws affect your quality of lifestyle and/or impact or protect the property’s value in the future?
- Are you interested in brand new only? an historic, character home? an already renovated resale? a solid, older home that just needs redecorating? or can you purchase a “fixerupper” and do major renovations yourself?
- What combination of space do you require? Think not only about bedrooms, bathrooms and garages, but also about areas for hobby activities and children’s play; and storage for clothes, skis, bicycles, wind surfers, tools, garden equipment, etc.
- Is a large, well-equipped kitchen important to you? How about a fireplace? A large entrance hall? A sun deck? A pool?
- Would you prefer a small lawn and low-maintenance garden, or do you enjoy cutting grass and making things grow?
- Do you need a dwelling with room to eventually accommodate more children? Elderly parents? Inlaws? Do you require wheelchair accessibility either for you or your visitors?
- Are there any restrictions which could prohibit pets or rentals?
- What schooling is available: primary? high school? adult evening programs? college?
- How close are the schools and how do the students get there?
- Are the schools crowded?
- Is the sports program satisfactory?
- Do the students have a high achievement record?
- If your family has special educational needs, are these available?
Responsibilities of Seller’s and Buyer’s Licensees
Your Relationship with a Real Estate Licensee
- a duty of undivided loyalty to the client;
- a duty to keep the confidences of the client;
- a duty to obey all lawful instructions of the client; and
- a duty to account for all money and property of the principal placed in the brokerage’s hands while acting for the client.
What Should You Look For?
- What size and shape is the lot? Is it fully serviced with sewage, water, gas, and electrical lines?
- How many square feet of living space is there? How many rooms?
- Condition and age of the roof: Are there any leaks or recent repairs? If only part of the roof was repaired, will the rest cause trouble?
- Are there proper roof gutters and adequate downspouts which are properly connected to storm drains?
- Are the interior walls and ceilings solid? drywall or plaster? Is there any evidence of leaks or cracks?
- Are floors firm and level? What about the condition of the floor boards? and supports? Does the ceiling sag?
- Is there evidence of termites or dry rot?
- What types of floors are beneath the carpeting?
- Are stairs and door frames level and well joined? Is the natural lighting to your liking?
- Which way does the front face—north, south, east or west?
- Are the room sizes adequate for your family’s needs? Is the layout compatible with your habits?
- Is the kitchen suitable? Are there enough outlets and space for appliances? What about cabinets?
- Are storage areas and closet space adequate?
- Does it look like renovation work has been done? If so, are there copies of building, electrical and gas permits for this work? Plumbing work is covered by a building permit; however gas and electric work require separate permits.
- What is the condition of the electrical wiring? Are there cables visible in the basement or close to the electrical panel that are not fastened at regular intervals to the floor joists or walls? If so, that may be an indication that work was done on the electrical system without a permit.
- Is there a hot tub or swimming pool installed? If so, check for evidence that there are electrical permits for these installations—it is very important for you and your family’s safety that proper grounding of the electric systems for these devices is in place.
- Has a gas fireplace insert been added at some stage? Is there a gas permit for this installation? Proper clearances from combustibles for these installations are critical and evidence that a permit was taken out for this work is confirmation that the work was done by a licensed contractor and/or inspected by a qualified person.
- What about satisfactory ventilating equipment? Are there exhaust fans in the kitchen and bathrooms?
- What type of heating system is it (forced air, gravity, etc.)? What kind of fuel is used? Is there a heat pump?
- Is there sufficient electrical wiring? Is there enough power for your electrical equipment? Are there adequate outlets in the home? Has the fuse box been updated?
- Can the wall space be utilized to suit your needs? Check the locations of doors and windows.
- Drainage—is the home well drained and has landscaping been done to prevent erosion?
- What is the condition of the basement and foundation? You should check the walls and floors. Is the floor dry?
- Are there hookups for a washer and dryer?
- What about the attic or crawl space? Is there evidence of leaks? Dry rot? Is there proper ventilation and insulation? Does the insulation meet current specifications?
- Are there severe cracks in or excessive or uneven settlement of the foundation?
- How large is the garage? Is the driveway adequate? Is there cracking or lifting and is drainage satisfactory?
- What is the condition of caulking on windows and doors? What kind of storm windows are there and what condition are they in? Do windows and doors open and close easily?
- a sexual offender is reported to live in the neighbourhood;
- a former resident was suspected of being an organized crime
- gang member;
- a death occurred in the property;
- the property was robbed or vandalized; and
- there are reports that the property is haunted.
Is a Property Disclosure Statement available?
What is the Zoning on this Home?
Is a Land Title Search Available?
Are There any Restrictive Covenants?
Are There any Easements?
How Much are the Property Taxes?
Is the Structure Covered by any Warranty?
Fixtures vs. Chattels
Are there permits in place?
What About Strata Properties and Cooperatives?
- What are the monthly charges for common area maintenance (strata fees)? What services or utilities are included?
- Does the building have a good reputation for honesty and successful operations? Are units not controlled by the developer being successfully resold?
- Who controls the recreational facilities? Will you be required to pay extra fees for using any of the facilities or amenities? If it is a new development, is there a certain date when your unit will be ready for occupancy? Will the swimming pool and recreation facilities be completed by that date?
- How is the property being managed? Is the property being managed by a company licensed by the Real Estate Council to provide strata management services or is it being “self managed” whereby the management is the responsibility of the owners collectively?
- How much money is in the contingency reserve fund and what portion of the strata fee is being contributed monthly to this fund? What capital expenditures (common expenses that usually occur less than once per year or do not usually occur) is this fund being maintained for (e.g. roof replacement, water piping replacement, interior decorating upgrades, etc.)?
- Are owners permitted to rent their units to tenants? How many rental units will be allowed in the project?
- Are pets allowed in the building? Are there any other restrictions on use?
- Have any special assessments been agreed upon or have any structural problems been noted which may lead to a special assessment in the future?
- Has the building envelope been renovated in the past? Since October 1, 2000, all contractors who engage in, arrange for, or manage building envelope renovations in British Columbia must be licensed as a building envelope renovator with the Homeowner Protection Office and must provide applicable third-party home warranty insurance on applicable building envelope renovations.
- What about parking stalls and storage lockers? There are two main designations of property in strata developments which can be found on a strata plan—those being property designated as either a strata lot or common property (CP). Common property can then be further designated as limited common property (LCP) for the exclusive use of one or more strata lots. The strata plan usually contains one or more of the following arrangements for parking stalls and storage lockers.
- the parking stall or storage locker is a separate strata lot. Although rare, parking stalls and storage lockers can exist as a separate strata lot with their own strata lot number. This designation can be identified by looking at the strata plan.
- the parking stall or storage locker is part of a strata lot unit. Parking stalls and storage lockers that are part of the strata lot will share the same strata lot number as the unit (the main strata lot) which uses the stall or locker. This designation allows the buyer to have automatic use of the stall or locker.
- the parking stall or storage locker is part of the common property. If the parking stall or storage locker is part of the common property, the strata corporation has ultimate control over the use of those areas, except in cases where there is a developer’s lease. Common property is owned by all owners as tenants in common. The strata council has the authority under the Strata Property Act to permit an owner to exclusively use common property.
- the parking stall or storage locker is limited common property. Limited common property (LCP) is common property for the exclusive use of the owner of a particular strata lot. If the property is designated LCP, although it continues to be owned by all owners within the strata corporation as tenants in common, it may be used exclusively by the owner whose strata lot is identified on the strata plan as being entitled to use the LCP.
- Appraisal Report: provides guidance to the value of a property and may be required by mortgage companies or obtained by buyers who want an estimate of the value of a property.
- Depreciation Report: helps strata corporations plan for future repair and maintenance costs and helps prospective buyers to understand what repairs will be required and the future costs to a strata corporation to undertake the repairs.
- Electrical Inspection: an inspection of the electrical system and components of a property which will identify the deficiencies, if any.
- Engineers Report: provides information on the integrity of any buildings and other aspects of the property.
- Environmental Report: assists in determining if there are any environmental problems or considerations with a property, including but not limited to asbestos, radon gas, underground oil storage tanks or riparian areas.
- Furnace and Chimney Inspection: assists in determining if the furnace and the chimney meet current safety and insurance standards.
- Gas Line Inspection: undertaken by a natural gas utility, determines the integrity of gas lines and if any improvements to the property have been built over the gas service lines requiring their relocation.
- Home Inspection: provides information on the physical condition of a property.
- Municipal Compliance Report: from the municipality provides information relating to (non)compliance with municipal bylaws and regulations, or to waivers granted by the municipality.
- Plumbing Inspection: an inspection of the plumbing and drainage components of a property outlining any deficiencies.
- Property Disclosure Statement: a statement provided by a seller concerning the condition of a property, to the best of their knowledge.
- Surveyors Certificate: a report showing the property boundaries and the location of all improvements in relationship to those boundaries.
- Septic/Sewer Inspection: determines the condition of the sewer/septic system.
- Title Search: ascertains the ownership of land and whether there are any easements, restrictive covenants, leases, mortgages and encumbrances and charges registered against the land.
- Water Quality/Quantity Test: determines the recovery rate and quality of the water supply.
- Wood Stove/Fireplace Inspection: undertaken to determine if the wood stove or fireplace meets insurance requirements.
What Should the Offer Contain?
- Date of offer. Date and time your offer expires.
- Full legal names and addresses of both the buyer and the seller.
- Full legal description of the home.
- Amount of the deposit you are giving (which will be held in a trust account and will form part of your down-payment).
- Sale price.
- Amount of your cash down-payment and details as to how you will finance the remainder of the purchase price. Your desired closing and possession dates.
- A list of the conditions which must be satisfied before the sale can occur. These are called “subject clauses” or “conditions precedent.”
- A list of items which are not attached to the building (chattels), but which you state are to be included in the sale price; for example, drapes, refrigerator, stove, etc. It is helpful to be specific in the description of these items. Your signature.
What are the Seller’s Options?
Accept the Offer Exactly as Written
Reject the Offer
Ignore the Offer
Make a Counter-Offer
What are the Buyer’s Options?
More About “Subject” Clauses
- a satisfactory professional building inspection
- the arrangement of the financing you require
- the lender’s approval of your application to assume the seller’s existing mortgage
- the sale of your present home
- if the home is a strata lot, satisfactory review of all relevant strata documentation, including engineer’s reports and/or building inspection reports, if any.