The Big Home Search

Sellers

Knowing what your home is worth at the present market. Sign up for a Market Snapshot to see similar homes listed, recently sold, and expired in your neighborhood www.activeandsold.com 

Buyers

Create your own Personal MLS Listings Search, the same system that is available to Realtors. Visit www.yourownmls.ca

The Big Search. How to begin?

Now it’s time to begin your informed search for that “right” home. You have gathered all the information you need to make a rational decision rather than an emotional one, but it may not be easy! You, like everyone else, will probably want what you can’t afford. Try not to become discouraged. Every homeowner started somewhere and it is most likely that there is a place for you!

What should you look for?

After you have found a home, don’t be shy! You are about to invest a lot of money and you should investigate each home thoroughly.

Pay particular attention to the following:

• 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 floorboards? 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 is 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?

Each home is unique. Keep some notes to help you to remember the details later!

Buyer Beware!

If you think you have found the right home, but you have some concerns about its structural soundness, now is the time to call in an expert. Consider having the home inspected by a building inspection service which will prepare a written report. Your purchase is a big investment, so think of the fee for this service as an insurance premium.

Be aware that home inspections are primarily visual inspections and they may not reveal problems with electrical or gas systems. If there is evidence that there are some issues with the electrical or gas systems and/or work has been done without appropriate permits, you should consider having people with qualifications in those areas inspect those systems.

Stigmatized or Psychologically Impacted Properties

Sometimes when dealing in real estate, the onus will be on you, the buyer, to ask questions regarding issues of specific importance to you and your family, rather than relying on a real estate professional to try to anticipate all of your needs.

If, as a potential buyer, you are concerned about the less obvious structural and mechanical aspects of a property, you can have a property inspection done. However, sometimes consumers may have other areas of concern that would cause them to avoid a property. Certain events may cause a property to be described as a “stigmatized property” or a “psychologically impacted property”. These terms are sometimes applied to a property that has had some circumstance occur in or near it, but which does not specifically affect the appearance or function of the property itself.

Examples of these in a residential context might include:

• a sexual offender is reported to live in the neighbourhood
• a former resident was suspected of being an organized criminal or gang member
• a death occurred in the property
• the property was robbed or vandalized
• there are reports that the property is haunted.

British Columbia law does not define stigmatized properties. It also does not require sellers or real estate professionals who represent them to disclose circumstances which some may be considered to be stigmas.

Buyers are advised to carefully consider the areas of concern they have, discuss their concerns with the real estate professional representing them, and ensure the necessary inquiries are made to avoid purchasing a property they will not feel comfortable living in.

Other questions to ask

Is a Property Disclosure Statement available?

In British Columbia, sellers may have completed a Property Disclosure Statement. This statement provides information about the state of the home to potential buyers.

What is the zoning?

The zoning on a home is established by the local government. Zoning sets the type of buildings that may be built on any particular piece of property and how those buildings may be used: single-family residential, duplexes, multi-family residential, commercial, or industrial.

You may also wish to ask about the zoning on the surrounding properties to determine if, for instance, a factory or a park could suddenly appear nearby.

Is a Land Title Search available?

A Land Title Search will allow you to see who is registered as the current owner of the home and if there are any registered mortgages, easements, restrictive covenants, rights of way, etc. which may affect the use or value of the home.

Are there any restrictive covenants?

A restrictive covenant places a specific limitation on the owner’s use or occupancy of the property. Such things as a prohibited type of exterior finish, the minimum size of the structure, or the maximum height of the structure are only a few examples of the type of restrictive covenants you may encounter. The act of purchasing a property that has a restrictive covenant compels you to abide by it.

Are there any easements?

An easement is a right or privilege one party has to use the land of another for a special purpose.

Examples are: easements given to telephone and electric companies to erect poles and run lines over private property, easements given to people to drive or walk across someone else’s land, and easements given to gas and water companies to run pipelines to serve their customers.

How much are the property taxes?

As stated earlier, the amount of property taxes payable will figure in the calculation of how much money you can borrow to finance your purchase.

Is the structure covered by any warranty?

Homes built by a licensed residential builder under a building permit applied for on or after July 1, 1999, or where construction began on or after July 1, 1999, in areas where no building permit is required, are subject to the mandatory third-party warranty insurance provisions of the Homeowner Protection Act, unless there is an applicable exemption.

Your real estate professional can assist with acquiring warranty information.

The Licensing and Consumer Services Branch of BC Housing can assist with questions regarding warranty issues. You can reach their toll-free information line at 1.800.407.7757 or visit their website at www.bchousing.org/licensing-consumer-services.

Fixtures vs. Chattels

Things contained in a building or on the land are classified as either fixtures or chattels.

The difference between a fixture and a chattel is very important to you because fixtures stay with the home when it is sold, but chattels depart with the old owner.

If you see an attractive fireplace insert, a “murphy bed” in the spare bedroom closet, a vacuum canister in the utility, or custom window blinds that you think should stay, but are not certain if the seller agrees, ask if it is a fixture.

Are there permits in place?

Are there permits in place for building and/or renovation work and for the electrical and gas systems including original and alterations/additions?

For information on what type of work in a home requires gas and electric permits, please contact Technical Safety BC at 1-866-566-7233.

What about strata properties and cooperatives?

If you are contemplating the purchase of a home that involves the strata or cooperative type of ownership, there are some additional points to consider:

• 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 RECBC 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 BC Housing 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 that 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 separate strata lots 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.

If the parking stalls or storage lockers are designated common property, owners are entitled to use a particular area as a result of the strata council’s grant of exclusive use to that owner. This designation is handled by way of a short-term exclusive use agreement whereby the strata council allows the owner to exclusively use a particular parking stall or storage locker for a limited time period of one year. Although the strata council can renew the arrangement, it can also choose not to renew.

In some strata developments, the developer has entered into a lease of the common property parking stalls and storage lockers to itself or to a company related to the developer. After leasing the common property, the developer then enters into agreements with buyers in which the developer subleases one or more parking stalls or storage lockers to each buyer. Often, the developer will assign one parking stall or storage locker to a buyer. These leases are seldom registered on title, which can make discovering them a challenge.

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.

What information should you obtain about the building? Ask to see the registered bylaws, current rules, annual operating fund budget, Information Certificate (Form B prescribed under the Strata Property Act) and at least the last two years’ minutes of all meetings (including strata council meetings, annual or special general meetings and meetings of the executive (or of the members) of any section in the strata corporation to which the strata lot belongs).

You should also ask to see any applicable warranty information, envelope inspection reports or remediation reports, the registered strata plan and any amendments or resolutions dealing with the common property and any correspondence to owners from the strata council over the last twelve months. These documents will govern the manner in which your unit and the common areas may be used. They will also advise you of what has been going on in the building.

Read these documents very carefully as they may reveal potential problems in the building.

Ancillary services

Inspection and Additional Investigation Reports

You have a property on which you want to make an offer!

You may want to consider engaging the services of experts to provide inspections and reports on important components of a property. These services may be engaged prior to you making an offer or, more commonly, you may make your offer subject to you receiving and being satisfied with applicable inspections or reports. The cost of commissioning any inspection or report will vary and should be factored into your overall purchasing budget.

The types of inspections and reports you may wish to obtain will depend on the type of property — is it a detached house, a strata-titled unit, or a recreational property? The mechanical and service components and geographic location of the property are also considerations when deciding on the kinds of inspections and reports to review.

Below is a list of the more common inspections and reports that are available to buyers. The list is organized alphabetically, not by order of importance, as the degree of importance of a particular inspection or report will depend on the specific nature of the property.

• 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 that 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.

You may request other inspections or reports concerning specific components of a property, such as the roof, air conditioner, or any other component where the condition of that component would be material to your decision to buy a property.

Questions?

We are ready to answer any of your questions. Call Stan Stanchev at 604-202-1412.

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