As a home buyer you go online and decide to call a listing agent about a property. Nothing wrong with that right? Actually there is something wrong with it and your rights as a home buyer are not being fully protected when you do.

A listing contract is a contract between a home seller and a real estate agent who is hired to represent the seller in the sale of the house. The “listing agent” has obligations to the seller that are described in law. The law of Agency (currently referred to as Designated Agency) states that the listing agent has a number of duties to the seller such as loyalty, and to exercise skill and care to get the best price and terms for the seller. The listing agent works for the seller and not the buyer.

When a buyer calls a listing agent directly they may not be aware of the risk of doing so. The BC government is and the BC Real Estate Council is eliminating the practice of dual agency in BC effective March 15, 2008. If you needed the services of a good lawyer would you call the lawyer representing the other party? Why then would you call a real estate agent representing the other party?

It is amazing to see listing signs that say “call me directly” on a specific listing. It is also interesting to hear all of the reasons why listing agents love to be called by buyers. At the end of the day many are merely hoping to double end the sale by either representing both parties through dual agency or by treating the buyer as a customer and also double ending both sides (listing and selling) of the real estate commission. Soon the practice of representing both sides will be eliminated by law in BC.

Why do buyers do this? Some have told me that they believe that the listing agent will know more about the property than any other realtor. This is not always the case and sometimes just the opposite is true. Why do people do things that they do? Why are things not always as they appear? The book Truth decoded delves into many of these reasons.

If you are a seller and need a good real estate agent go online and see what other people have said about the various agents. Then ask to speak to someone who used the services of the realtor. If a friend or acquaintance recommends someone ask them if they are getting a referral to recommend the person. Just because an agent has a specific number of listing advertised in a local newspaper does not mean that they are the best option. Some agents do not advertise in print media anymore because buyers are almost all online so print advertising is money wasted that could be spent online getting the visibility that your home needs for it to sell. As well, some listing agents focus on listing homes and sales are a secondary focus. Agents who represent the buyer who buys the home are credited with the “sale” even though their name is not recorded on the sign with the SOLD on it.

If you are a buyer who needs a good real estate agent go online and see what other people have said about the various agents and ask to speak to clients of the agent to get first hand feedback. Some agents just list homes, some just represent buyers and others help buyers and sellers. Ask if the agent ever represents both parties either as a client or a customer. If they say yes ask them why. Remember the earlier discussion about the government ceasing the practice of dual agency on the 15th of March 2018. A real estate agent should be prepared to commit to you as either a buyer or as a seller so that you receive the highest level of service and most protection under the Law of Agency.

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• Why Not Call a Listing Agent?

Why not call a Comox Valley real estate listing agent? Real estate listing agents work for the home seller. Why not call them if you are a home buyer? Shortly after the dawn of the information age in the 1970s, people’s appetite for more and better information increased. This trend continued with the introduction of the internet in the early 1990s. Today, buyers of real estate generally begin their searches online and many will ask for additional information on specific listings. A word of caution. When you ask a real estate agent questions about a listing, understand the context of the conversation.

What do I mean? It is important to understand that the Law of Agency changed significantly in British Columbia in June of 2012 when Designated Agency was introduced into the province. This law explains the type of relationship that a person can establish with a licensed real estate agent. It also explains what protections you may or may not have under the law.

Understand, for example, that a listing agent has a contract with the seller to help market and sell the property that is listed. The agent’s loyalty is to the seller and not to a home buyer who may contact the listing agent about a specific property. While the listing agent may be happy to talk to you about the property in the hope that you place an offer on it through them so that they can make a commission on both ends of the real estate transaction, this is not in the best interests of the buyer to do so. Be careful what you tell the agent and what you ask of the agent. Depending on what you ask, you may actually be establishing some type of professional relationship without knowing it, and you may divulge information about yourself that could be used later to your disadvantage in a real estate transaction.

The real estate Law of Agency commonly referred to as “Designated Agency” is currently in effect. Prior to 1994, this law was referred to as “Seller Sub Agency” when all real estate agents worked for the seller. Between 1994 and 2012, “Assumed Buyer Agency” contained provisions for Limited Dual Agency when, in many situations, the buyer and seller had to be treated impartially by a single agent working with both parties. In these types of situations, the real estate agent had restrictions placed on them by law concerning what they could and could not tell each party to the real estate transaction. While Limited Dual Agency still can exist today, the number of situations where it could apply has been markedly reduced by the introduction of Designated Agency.

Under current real estate law, there are two different types of relationships (one based on agency or one based on no agency) that could exist between a real estate agent and the person who is either the buyer or seller in a real estate transaction. This person can be either a customer or a client as follows:

1. As a customer, the person will not have any agency relationship and the real estate agent can provide you with information and limited services. A good analogy is a person who walks onto a car lot wanting to buy a car. The dealer will try to sell you one but they are not looking out for you;
2. As a client, the person will have an agency relationship that will involve either a Limited Dual Agency or Designated Agency.

Limited Dual Agency can apply when a real estate agent is working for two buyers who want to place an offer on the same property or when a real estate agent is working for a seller and a buyer at the same time and the buyer wants to place an offer on the property of the seller. In these situations, both parties have to agree to Limited Dual Agency and if they do, the real estate agent is supposed to treat both parties impartially. There are several other restrictions placed on the agent concerning what they can and cannot do or say. While this may sound reasonable in theory, how well can it work in practice? Would you want a lawyer working for both parties in a lawsuit working for you or would you want the lawyer working only for you and your interests?

When a real estate agent brokerage designates a specific real estate agent to work solely on your behalf in real estate transactions, that agent is a Designated Agent of the Brokerage who represents you and your interests exclusively in a real estate transaction. As a real estate agent, if I were going to buy or sell a home, this is the relationship that I would choose.

So, as a home buyer, if you call a listing agent about a property, understand that the agent is working for the seller and that the only thing they could offer you (if the seller agreed) is a Limited Dual Agency relationship.

This brief discussion merely provides an overview of the new law. To gain a more thorough understanding of the Law of Agency, read the British Columbia Real Estate Association brochure . Working With a Realtor Designated Agency. This brochure provides a more detailed explanation of the relationship between you and a Realtor as well as an explanation of the collection, use, and disclosure of personal information. It is important to note that all Realtors in BC are required to explain this brochure to you at the earliest opportunity, and prior to providing professional services such as the showing of a home or advising on price. If you are working with a real estate agent and if you have not had this brochure explained to you, ask why not.

As a professional full service real estate agent, I am ready to provide you with representation and services on an exclusive basis to help you buy and sell real estate in the Comox Valley. Contact me and let’s talk about how I will go Above & Beyond to help you meet your real estate needs.

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• Real Estate Investing – 8 Fault Lines and Land Mines

To not know is Cause for Concern. To not ask is Inexcusable.

Real estate investing can be very rewarding financially but at times it is not for the faint of heart. This is especially true when buyers are not vigilant and diligent. Real estate investors need to exercise due diligence in a number of areas before committing to purchase real property. While investigating a home or property, issues may crop up that can be described as either cosmetic defects, fault lines, or land mines. Cosmetic defects are minor faults in a home are easy to spot and fix. They have very little, if any, impact on the value of the investment. Real estate fault lines are visually detectable on the surface but they require further investigation below the surface in order to assess potential impacts on the property’s value. Real estate land mines, if not discovered before investing in a property, have the potential to ruin your day, and your investment.

 
The business side of real estate investing has been described in a myriad of articles by expert authors. Sophisticated investors will often tell you things like: do not over extend yourself; do not get emotionally attached to what you plan to buy; run the numbers to see if the planned investment makes financial sense; calculate the risk (both short and longer term); look for location; and obtain professional help and advice if you are not an experienced investor. While each of these aspects of investing has merit they will not be discussed here. This article focuses on 8 topics that have the potential to adversely affect, and even damage a real estate investment. The following points apply to residential real estate but many of them can also apply to commercial properties.

Keep it Real

Reality real estate TV programs have multiplied like rabbits in recent years. It is important to remember that these shows are made for TV first and foremost. While they may offer entertainment value to interested viewers, not all of the so called lessons should not be applied to real life situations. Some of the personalities on these shows are merely actors portraying the licensed professionals that they are assumed to represent. Enjoy the shows for what they are but consult with real practicing professionals in the real estate industry for help, information, and advice.

Check the Title

The title of a property can have any number of things registered and recorded on it. This starts with the type of current ownership. The owners of Freehold properties will be registered as either joint tenants or tenants in common. Knowing this distinction is important because it can affect the ability of a seller to place the property for sale in some situations. Titles can also have legal and other notations on them that prevent the transfer of the title from a seller to a buyer in some situations and circumstances. Have the title reviewed by a lawyer if you are not sure of what the entries mean.

Check Municipal Files

Local municipalities generally maintain files on homes and properties within their jurisdictional areas. This is one of the first things that an investor should check to ensure that everything is as it should be with the home and/or property. Many files contain routine information but once in a while a file may contain something of significance that could affect the value of the property. For example, a significant local improvement may be planned for the area within which the property is located that will result in a future significant financial levy on the property. This is something that should be discovered before, and not after, a commitment to purchase the investment property.

Confirm Permits

The construction, renovation and demolition of residences are regulated by building permit application processes at the municipal level. These lower levels of government are given the responsibility to ensure that construction, renovation and demolition plans meet the requirements of prescribed codes. The municipal planning department should have things such as building and occupancy permits on file for the home. If the home has had a major renovation with no corresponding permit on file for the renovation it is time to ask more detailed questions. If a home was built or renovated without the required permits and related inspections, it is impossible to know if it was built to code. Insurance companies take a very dim view on construction done without the required permits when something goes awfully wrong.

Talk to Local Residents

Few people really know a specific neighborhood like the people who live in it. Neighbours can be both watchful and nosy when it comes to the goings on is “their” community. People talk and they routinely share information about other people. If there is a drug lord or gang living in a local community, the people who live nearby will likely know, or as a minimum, suspect something nefarious is occurring. Knowledge of someone dying a horrible death in a home,  rumours of haunted houses, and many other things may be the subject of banter by local residences. Stigmatized properties are homes that are associated with certain events that, while they may not directly affect the appearance, function or use of the property, may affect the value of the property in the eyes of others. Knock on a few doors and talk to neighbors about your interest in acquiring the property and you may find out some very interesting things that do not show up in local databases.

Discover Latent Defects

Almost all homes have some defects that can vary from very minor to quite major. Patent defects are obvious flaws that are discoverable upon inspection and ordinary vigilance on the part of a purchaser. They include things like a hole or crack in a wall. Latent defects are more significant because they are not visible upon ordinary inspection but they materially affect the property’s use or value. Many areas have laws that require material latent defects to be disclosed by sellers. These types of defects are often disclosed in documents such as property disclosure statements filled out by the seller. When no such documents exist, a prudent buyer will ask about the existence of these types of defects. Additional investigations and inspections are also prudent approaches to ascertain where or not the property is affected by such defects.

Confirm Property Access

Physical access to most urban properties is fairly obvious and straight forward. Sometimes, however, access is less obvious with rural properties. Consider an entrance to the back of an out building on a rural property that originates from a neighboring property. Is there an agreement in place to provide for such access? Property access is about more than how one enters a specific property. It is also about who can enter the property with the requisite authorization. For example, the title to a property can reveal easements and rights of way that give rights to other people and/or organizations to enter the property under specified circumstances. This is information that a buyer needs to know before buying a property.

Investigate and Inspect

As a rule a buyer should not buy an investment property without having completed reasonable investigations into, and inspections of, the real estate. This due diligence is the only way to reduce the risk of caveat emptor which is the legal principal that makes the buyer responsible for checking the quality and suitability of goods before a purchase is make. There are a number of different databases that can be checked to ascertain specific things about a home. As well, there are any number of inspections that can be completed on a specific type of home and property. This is where professional local help comes in if you are not experienced enough to know what to check, and under what circumstances. When you plan to buy in a specific local area engage a local expert to help you decide what types of investigations and inspections should be done.

Tip of the Investment Iceberg

These 8 tips represent the tip of the iceberg on what a buyer should do when considering the purchase of a real estate investment. Relying on these alone will not give you all of the information that you need to make informed real estate investment decisions. They are, however, a good starting point that will help you see what may lie below the surface of a home or property. A competent and experienced local real estate agent with expert market and area knowledge can be a very beneficial ally to most real estate investors.

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• Why not to Buy a Home off of Internet Real Estate Listings

Buying a home off of the internet is fast, easy and a good idea; right? Wrong. There are many reasons why not to buy a home off of the internet. Let’s explore a few of them here.

Clearly the internet provides a service of unprecedented capability if used correctly. Now information can be disseminated, and shared quickly and widely around the world and individuals can interact and collaborate without having to be in the same geographic area. We can also purchase things using the internet. Almost anyone with a smart phone or tablet or a desktop or laptop computer that can be connected to the internet can order just about anything from almost anywhere in the world and have it delivered to your home in a week or two. Ordering a car part from a reputable business can save you a lot of money but trying to locate and buy your next home via the same medium can create frustration and much more. Why, you ask?

Buying a Car Part from the Internet
Buying a product such as a car part over the internet can be fairly straight forward. The product has a part number and a description and online stores will have a fitment application guide to ensure that the part will fit your car. Before ordering a part, however, it is often useful to ask where the part was manufactured and to check to see if anyone has reported any problems with that particular part. Not all parts are manufactured to the same level of quality. A car part made in the USA will often be higher quality than one made in China. Provided that you order from a reputable retailer you should receive what you expect.

Buying a Car from the Internet
Buying something larger and more expensive like a car or boat can also be facilitated through the internet but a higher level of due diligence on the part of the buyer is needed to ensure that a prospective buyer gets what they expect. While the type and model number of a larger and more expensive product can be readily confirmed over the internet, the condition of the product cannot. Buyers should actually view, inspect and drive the car before committing to the purchase.

Buying a Home
Buying a home can be vastly different than the purchase of a product such as a part for your car, or a larger more expensive product like a car or boat. With a few exceptions, when you buy a home you are buying both a home and the property that the home sits on. You are also buying into a neighbourhood and local area. What do you know about the local area and neighbourhood? What do you know about the property and the bylaws and other regulations that may be applicable to it? What do you know about the home, who built it and how it has been maintained? What do you know about the local improvements that are planned for the local area that may affect either the home’s value or the levies and assessments applicable to the home and property? Was the home used for any illegal purpose? Does the home have any material latent defects? Is the home or any portion of the property designated as a heritage site?
What do you know about the seller and what they used the home for? Does the seller have legal authority to sell the home? Is the home is being sold by an executor of an estate has the property been through probate? If the home is being sold by a corporation does the person representing the corporation have authority to act for the corporation? Is a power of attorney involved?

Home titles contain information on the real property such as the name (s) of the registered owner (s), the taxation authority, a description of the land, legal notations, charges, liens and interests, if there is a duplicate title and it may also contain information on transfers and pending applications. Would you want to know if there is something on the title that will prevent its transfer to a new owner? Does anyone not listed on the title have an interest in the property? Are there any covenants, building schemes, rights of way, easements, leases, tax notices or financial encumbrances on the title of the property?

Homes and the properties that they are affixed to can be affected by any number of other considerations. Riparian regulations, airport regulations, contamination, and undersurface rights are but a few of them. Are there any non-registered encroachments or rights of way on the property boundaries? Was there any recent construction on the home and was the work done via a permit? Is the home being sold by an owner-builder? If the home is newer does the Homeowner Protection Act apply? Are there any access issues or site restriction issues? Does the home have any other systems such as a septic system or well? Is the property affected by a flood plain? Is there a tenant or any leased equipment in the home? The aforementioned issues are only some of the potential issues associated with buying a home and / or property. Buying a home is a process that can take weeks or even months to ensure that a reasonable standard of care is used to ensure that a buyer is purchasing what they think that they are buying.

Comox real estate listings can be viewed online but only very limited information is presented on the listing. While so called ‘virtual tours” and video may be helpful they still only present a small part of the overall picture of an home and the property it resides on. Online listings should be considered nothing more than a starting point in order to get a general sense of the local real estate market. A buyer cannot get a good sense of any home without actually viewing the home. Even after viewing a home, more information is required as part of the due diligence process before a buyer commits to buying a home.

Buyers should avail themselves of a competent and trustworthy real estate agent to help them find their next home. Buyers do not pay for the services of these experts so why would any buyer not want such help? There are many steps in the home buying process and much more to consider than what is discussed in this short article. If you are thinking about buying a home in the Comox Valley contact the Brett Cairns real estate team and ask Brett to be your local area expert and agent.

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• 15 Must Know Steps to Buying a Home in British Columbia

Buying a home and becoming a homeowner involves costs, risks and responsibilities. Did you know that more than one third of Canadian homeowners recently polled in a Manulife survey stated that they were caught short of funds at least once this past year? About 10% said it happened to them a few times and around four percent stated that they were in a financial shortfall almost every month. The survey was conducted by Environics Research between February 3^rd and 20^th of 2016.

Most home buying experiences are unique to the person and the home that they are buying. However, there are 15 must know steps in the home purchase process that are common to almost everyone. Knowing what they are can make you better prepared for what is the largest transaction in most peoples’ lives.

Step 1. Confirm you are ready for Home Ownership.

Home ownership is a very big decision and it involves a large upfront purchase and ongoing maintenance to preserve the value of the home and property. It also involves knowing what laws and bylaws apply to the land and home that you purchase so that you know what you can and cannot do with them. Some people think that they can do whatever they want on their property but this is not realty in today’s highly regulated world. Property use is regulated by local zoning bylaws and individual land titles often have things like covenants, building schemes, easements and other restrictions on them. In addition to the costs and responsibilities of home ownership there are risks. Earthquakes, floods, fires and other perils have the potential to do damage to homes and most people purchase insurance to address the potential risks thereby adding to the ongoing costs. Knowing and understanding what is involved in the purchase of a home is an essential first step in the home buying process. If you are a first time buyer check to see if any government plans apply to you (federal or provincial).

Step 2. Know and Understand Your Credit Rating

Because large sums of money are involved, your credit rating is important. Most people require mortgages to buy a house and the interest rates paid on mortgages are sensitive to and affected by your credit rating. Your credit history is maintained by at least one of Canada’s two major credit-reporting agencies. They are TransUnion and Equifax Canada. Financial lending agencies use the reports generated by these organizations to decide whether or not to give you credit. The poorer your credit the higher your risk and the more you will pay to borrow money. If your rating is low enough you may not even qualify to borrow money. It is very important to know and understand your credit rating and score so that you understand your financial health from the perspectives of the potential lenders. Credit scores range from 300 to 900 in Canada and they are produced under brand names such as FICO, Beacon and Empirica. For example, a score of 300-559 may be considered poor, 560-659 fair, 660-724 good, 725-759 very good and above 760 excellent. The specific numbers may vary between organizations but they are indicative. Higher numbers are better. Do you know yours and what it means?

Step 3. Get Pre-Approved for a Mortgage

Getting pre-approved for a mortgage is very important before you start to shop for a home. Locate a competent mortgage broker who can look at a range of options for you. Understand, however that a pre-approval is different from a pre-qualification. If a lender only prequalifies you they are only providing you with an estimate of what you could borrow. It does not mean that you will get a loan. If a lender preapproves you that lender is generally prepared to give you a loan after reviewing your financial information. While you are getting preapproved, and if you a first time buyer, ask the mortgage broker if there are any benefits that may apply to you as a first time buyer. After getting preapproved it is important to understand that the home that you choose and what you agree to pay for it also plays a role in the decision to give you a loan. So if you buy a high risk home and pay way too much for it the probability of getting a loan is greatly reduced. Knowing and understanding these three different factors will help get you prepared to contact a real estate agent to help you find and buy a home.

Step 4. Determine Your Needs and Wants

Thinking about what you need and want is also very important. What must you have in a home and property to meet the needs of your family? What would you like to have if you can afford to pay for it? Do you really need to have a nice view of the ocean or is being close to schools a more important need? Taking the time to think through and document your needs and wants will help you decide when you do start looking for a home. Buying a home can take the form of an emotional experience for some people. After all you will be purchasing your private residence and sanctuary and you will be living in it each day of your life.

Step 5. Engage a Real Estate Agent

The real estate industry is not well understood by too many people. This is borne out by statements such as: I am not willing to commit to a single agent; I am going to interview agents before I hire one; and I do not need the services of a real estate agent. The laws and regulations in BC stipulate that an agent cannot interfere with the professional relationship you have with an agent. In other words, you cannot have more than one agent working for you in the same area. If you choose to “interview” an agent it is important to remember that they are also interviewing you because they will be committing their time and money to helping you so the fit has to be both ways. As well, as a home buyer you can engage the services of a real estate agent without having to pay anything for their professional services. When you buy a home the agent is paid by the seller through the agent’s agency after the deal completes. Why would you want to do it alone if you can get the help of a professional without having to pay for the services that you receive?

In British Columbia you can engage the services of a real estate agent as either their customer or as their client. To understand the difference think of the professional business relationship like this. As a customer of the agent they will be selling you a home. As a client they are doing whatever they can to help you meet your needs in buying a home. The current law that applies to this relationship is referred to as the law of Agency and the current version is called Designated Agency. In addition to these two fundamentally different forms of representation there is also an option for limited dual agency in some situations. As a buyer you are best served by being a client of the agent and the agent should be working exclusively for you as your buyer’s agent.

Step 6. Know and Understand the Local Real Estate Market

The Courtenay real estate market, like any other financial market can and do change over time. In general terms a market can be a buyer’s market, a seller’s market or a neutral market. These general conditions can exist across the entire market and they can exist within segments of a particular market. Market conditions can and do affect the price that you can expect to pay for a specific home. Competent agents will understand all of the factors that go into the preparation of an offer and they will be able to advise you on things like terms, conditions, price and down payment. The motivations, character, competence and experience (both industry and life) will vary from agent to agent. Choosing the right agent is important.

Step 7. Start Looking Online

When it comes to looking for homes there are many sources of information. Magazines, newspapers and the internet all can provide information on homes for sale. The problem with print media is a fast moving market is the lead time required for publications to go to press. Magazines can have lead times measured in weeks and newspapers often are in days that can extend a week or more into the future. The most responsive mechanism is the internet but even it is not instantaneous. The information on websites needs to be refreshed to display new information and new pages need to be indexed to be displayed in searches. The internet is a great place to start looking but it is important to remember that homes and properties displayed on online listings can and often do look different in real life.

Step 8. Get Access to Local MLS Listings

After you secure the services of a real estate agent they should be able to create an account for you and send you Multiple Listing Service (MLS) listings as soon as new listings come on the market to help you in your home search. The MLS database feeds public websites that display MLS listings. Done properly this access will save you the time of going to public websites to search for and find what you are looking for. Understanding what the MLS is, does and can do for you is important. Your agent should take the time to explain this to you.

Step 9. Choose a General Location

A local real estate market can cover a very large geographic area. It may contain both rural and urban areas and a variety of urban areas such as cities, towns and villages. The home buying process usually involves a process of elimination that starts with choosing a rural or urban area that works for you. The more you can narrow down your search to a specific area or areas, the more time you can spend looking at specific neighbourhoods, homes and the features that they offer. For example you may be looking for homes for sale in the Comox Valley but then quickly decide that your needs are best served in or around the Town of Comox.

Step 10. Go View Homes

Viewing homes in person is an absolutely essential step. This should be done only after you are preapproved, choose an agent and if you have a home to sell, getting an accepted offer on your current home? Why you ask? If you find “the home” and fall in love with it, especially in a fast moving real estate market you will need to be in a position to make an offer on it to have a chance at buying it or risk disappointment and losing out on it. While you can make an offer on a home subject to the sale of your current home this condition may not be something that some sellers are willing to accepted in some types of market conditions. Sellers are happy to spend the time required getting their homes ready for viewing by qualified buyers but they do not appreciate having lookie loos (also called tire kickers) come through their private residences. Often sellers will ask real estate agents to ensure that buyers who wish to view their homes are both qualified and serious. In some market conditions they will also ask if the buyer has a home to sell before they can buy when they are not prepared to consider offers of that type. Few people like having their time wasted and home sellers are no exception.

Step 11. Narrow Down Your Choices

Most buyers will narrow down the homes that interest them to a short list of homes. When you have narrowed the list down to about three home that could meet your needs it is time to take a second look. Bring a piece of paper and make notes. Jot down what you like and do not like and what you would want included in an offer and if there is anything that you would want excluded. Once you select the best of the three you should be ready to make an offer. Rarely should it be necessary to go back for a third look at any home. Sellers will expect a second look by serious buyers and if a third viewing is scheduled they will expect that an offer is imminent. Fourth viewings are extremely rare and if scheduled the reaction from sellers is often negative. While there are exceptions to every general rule this is often the norm in real estate viewings.

Step 12. Choose a Home and Make an Offer

The real estate offer is where the rubber meets the road. The preparation of an offer requires discussion of price, deposit, and terms and conditions. Unlike many “reality TV shows” or crazy markets like Vancouver, most real estate offers will have conditions in them. These are commonly referred to as “subject tos”.  The most common ones address things like title searches, property disclosure statements, financing, inspections and insurance. There are many others that can apply to a specific home or property and a competent real estate agent will be able to advise you on others that should be included to protect your interests as a buyer.

Step 13. With an Accepted Offer Investigate Condition Removal

When an offer is made subject to anything a specific amount of time will be written into the offer/clauses within which to carry out the investigation necessary in order to make a decision on whether or not to remove the condition or conditions. This may involve other professionals such as home inspectors, septic inspectors, land surveyors, biologists, municipal offices, notaries and lawyers etc. A competent real estate agent should be able to help you locate names of the professionals needed so that you can call them and choose the ones that work for you. As well, it is important to allow enough time for the condition removal period so that they can be scheduled for the appointments and for them to do their jobs and then for you to receive and review the information and then make a decision.

Step 14. Remove Conditions and Purchase the Home

The removal of conditions in a real estate contract is an extremely important step. Once conditions are removed and a contract becomes unconditional you have purchased the home via a legally binding contract.

Step 15. Complete the Buying Process

At this step of the process the focus shifts from the real estate agent and agency to your lawyer / notary who will deal with the next step of title and money transfer as well as the signing of final mortgage documents.

These 15 steps cover the main elements of the real estate buying process but it can often be more complicated than this and a competent real estate agent can help guide you through the entire process. When you need help in the Comox Valley, whether as a first time home buyer or as a senior citizen looking to downsize,

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• BC Home Foreclosures

Hey man I just saw a smoking hot deal on a number of home foreclosures. Have you ever heard this from a friend or relative? All too often potential buyers of a foreclosed property in BC think “Here comes a good deal”. The fact of the matter is that buying a foreclosed property requires a higher level of diligence on the part of a prospective buyer than many other homes for sale. Why you ask?

The word foreclosure means to deprive a borrower (in defalt) of the right to redeem the mortgaged property. The sales of foreclosed properties differ from normal house sales in a number of ways. The failure of a borrower to make mortgage payments as required is called Mortgage Default and this failure allows the lender to take legal action to protect their security. The most common remedy used by lenders is called foreclosure which can be an expensive and time consuming process. Once a property is subject to foreclosure proceedings, anyone who may be potentially affected by the action may apply to the court for Conduct of Sale. Most often this is the lender who makes this application and it allows the court to instruct that the property be listed for sale by the court (a Judicial Sale) and it prevents anyone else from listing the property.

The marketing of a home foreclosures by Judicial sale proceeds in much the same way as other non-foreclosure situations but when an offer is received the listing Realtor passes the offer to the lender’s representative who will at some point bring the offer to the court for consideration. Other people may attend court for the hearing of the Order Approving Sale and be given an opportunity to present a bid to the court. The vast majority of foreclosure applications are heard by Masters rather than Judges. Masters can only approve subject free offers.

Offers on foreclosures must include a Schedule A. The schedule A is a document that contains a clause confirming that the lender’s obligation is limited to bringing an offer before the court for consideration. Schedule A’s generally contain a number of clauses in them and they override and/or amend some of the standard clauses in a contact such as INCLUDED ITEMS (currently paragraph 7) and VIEWED (currently paragraph 8). Para 7 is deleted and Para 8 is deleted. Property in foreclosure actions is purchased “as is where is” and the buyer takes what they get on the possession date and there is no guarantee that the property will be in the same condition on the possession date as it was on the day it was viewed by the buyer. As is where is means that the buyer is accepting the property as it is and where it is on the completion date of the sale with no representations or warranties whatsoever as to the condition of the property.

In a normal non-foreclosure listing, sellers are asked to fill out a Property Disclosure Statement by answering a number of questions about the property for sale. In a foreclosure, there will be no PDS and the Schedule A often contains a clause which reads “The purchasers expressly agree that neither the seller nor its agents or representatives have any liability, responsibility, duty or obligation to disclose to the purchasers any information or knowledge that they have with respect to the condition of the lands and premises or any latent or patent defects thereto.”

In some circumstances, the lender may seek can seek an Order Absolute from the court which results in the lender becoming the new registered owner of the property. In this circumstance the lender can deal with the property as the registered owner and keep any profit upon sale of the property.

What is the borrower’s mortgage was insured? Let’s assume that the Conduct of Sale Order is made and that the property is listed as a Judicial sale. If, after a certain period of time, the property remains unsold, the insurer will take title to the property and pay the mortgage lender the amount of its mortgage. The lender then assigns its judgement (obtained at the Order Nisi hearing) to the insurer and the insurer works to sell the property.

When there is a tenant in a house that is in foreclosure, there is an added complexity. Tenant’s rights are protected by the Residential Tenancy Act and no court order is enforceable against a tenant unless the tenant is made a party to the proceedings. If the tenant is not named as a party to the foreclosure action, the Real Estate Services Act continues to apply. Section 38(2) deals with tenant eviction.

What about home insurance? Insurance companies often consider houses in foreclosure as a special risk and a buyer will likely not be able to obtain insurance on a foreclosed property until the day title is transferred to the buyer. It is possible that an insurance agent will decline to give the buyers insurance. As well, many insurance policies contain a clause excluding coverage for damage caused by a tenant.

This short blog just scratches the surface on home foreclosures and property foreclosures. Buying a home can be a stressful experience for home buyers. With foreclosed property sales, there is generally increased risk and uncertainty to the buyer, longer wait times for responses to offers, higher deposits, increased uncertainty in dates such as completion and possession, and longer waits for possession. At the end of the day, the sale price may not be, and quite often is not, the deal that many buyers are expecting.