Blog by Chloe Cartwright, BSW, RSW, ABR

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Purchasing Process

Buyers from the United Kingdom

An 8 hour plane ride but a world of difference in property styles
Buying Property in Alberta - It's different out here.

"The process of buying property in Canada is not quite what we are used to in the UK and because real estate laws are a provincial matter there may be differences between provinces." Chloe Cartwright explains.

I wrote this article for ISSUE 4, of FRESHSTART magazine in the United Kingdom.

Not only are our homes much more spacious than typical British homes and with a basement which can double the usable space, but our methods of buying and selling are different.

You will be impressed by how one realtor can access information on all available properties as 95 per cent of all real estate companies are MLS (Multiple Listing Service) co-operative. There is no need to drive to various communities hunting for signs on your own or finding estate agents in each community. Your Realtor can do the search for you.

Information Gathering

When you first contact a realtor they will ask a series of questions which will establish the criteria for an MLS search. Those criteria are then input into a computer data base which only MLS co-operative realtors can access and a list of potential properties is generated for you.
From there you and your realtor can review the information and narrow the group down to a short list of properties that you can decide to view in person. You will want to work with a realtor who will assist you in understanding the differences in terminology. For example a bungalow is a style of house where all of the main rooms are on one level. It will also have a full basement or even a walk-out basement doubling the living area of the home.

Viewing Properties
Your realtor will set up all viewing appointments and escort you through each property. The vendors will not usually be present for this viewing so you need not feel as if you are infringing on their territory. This gives you ample time and opportunity to take a really close look at things and visualize your furniture’s placement in the home.

It’s also part of your realtor’s obligation to point out less obvious deficiencies in the home and location and bring them to your attention.
It may take several days of viewings to find the community and the property that best fits your needs and your budget. Don’t be afraid of using up too much of your realtor’s time; your realtor is paid as a result of finding you a property and successfully executing an accepted Offer to Purchase. The realtor’s commission is paid by the seller of the property in 99 per cent of cases. There are exceptions and when this occurs it will be discussed with you at the time.

Writing the Offer
Once you have chosen a property your realtor will draft the Offer to Purchase on your behalf. This happens as soon as you know which property you are interested in purchasing.  Unlike the UK you don't need to wait weeks or months to see your Solicitor to have the offer written.  For many people this feels so fast but it is to prevent another party from purchasing the home you want.  Here again, it is your realtor’s role to advise you of your options regarding the offer.

Several steps are required in representing your interests. The realtor must investigate and inform you of the true market value of the property to prevent you from paying too much. Second, the realtor will advise you as to the amount of deposit you should submit with the offer and together you will work out the possession/completion date.
The deposit is considered ‘good faith money’ and is returned to you if the purchase falls through. Your realtor must understand your financial and family situation and make recommendations regarding any conditions to the Offer to Purchase. For example, an offer can be made:
  • ‘Conditional’ to mortgage approval
  • ‘Conditional’ to final job offer
  • 'Conditional’ to home inspection
  • 'Conditional’ to spouse approval (if you are looking by yourself)

Many other conditions can be identified depending upon your personal circumstances but the conditions above are the standard ones and these are usually completed within three to 10 days.
A seller is not obligated to accept an Offer to Purchase with any ‘conditions’ but only to accept an Offer to Purchase if the full asking price is offered Serious haggling in the course of purchasing real estate is customary.

Presenting the Offer
Your Realtor will meet with the seller(s) and the seller’s realtor to present your Offer to Purchase. The seller will review the offer and go over it with their realtor. At that point they may decide to do one of three things.

  • They may accept the offer as written.
  • Make a counter offer on any points within the offer: price, possession date, attached/non attached goods, or conditions.
  • They may simply reject your offer.

Your realtor will bring any communications back to you with the seller’s decision and this process may go on for several stages until there is a result.

At that point the property is considered ‘conditionally sold’ and then all parties have their pre-negotiated duties to perform within the time frame specified on the contract.

Once these conditions have been met the offer becomes a firm offer and the property is considered sold. At this point neither the buyer nor seller can back out.

There is no such thing as ‘gazumping’; the signed and accepted Offer to Purchase is a contract and the parties involved are each legally bound to it. However, if the conditions cannot be met in spite of best efforts to meet them, then the conditional sale collapses and the purchaser is refunded the deposit.

‘Conditional to sale of existing home’, also called a ‘Special Clause’ is another type of condition to the sale is where the purchaser must sell the house they currently own before they can complete the transaction.

The Buyer may request that the vendor sell them the property at x$ subject to the sale of their existing home within 30 days (sometimes as many as 90 days). In effect, if accepted, this type of offer gives the buyer a first right of refusal on the property.

The price and possession date are contractual but the vendor still has the right to market the property and if another ‘acceptable’ offer comes along, then the original buyer is given 24-72 hours to either complete the deal by ‘waiving’ the conditions or stand aside and let the alternate buyer have the property.

On the other hand this prevents the buyer from taking on too much of a financial load. If the buyer’s property does not sell within the given time frame then the contract expires. Much depends on the economic climate and time of year in the area. It is important to note that not all vendors will accept this type of special clause offer as it discourages other potential buyers.

Other duties

Your Realtor’s duties are not finished; they must remind you of upcoming dates of ‘condition’ removals, provide access to the home for home inspectors, appraisers, bank officers and insurance companies. They must ensure that the keys are ready for you on the possession date.
Your realtor will walk you through your property on possession date to insure that the property is in essentially the same condition as when you first made the offer to purchase.

One last and very important note on buying property is that the realtor identified on the sign or in the advertisement is the Seller’s Realtor! As such it is that realtor’s role to protect the ‘Seller’s’ interests. In order to have a realtor represent and protect your interests you want to have one independent from the Seller’s. This is called a Buyer’s Agent. Remember that in 99 per cent of real estate transactions, the seller pays both of the realtors involved in the negotiation process. Dealing with the realtor on the sign or in the advertisement doesn’t save you any money; it puts twice as much money in that realtor’s pocket and doesn’t ensure your interests are represented fairly or at all.

When the time comes, make your move cautiously and select people you trust to help you with these major financial decisions. Property here may be one third to one half of the price of similar properties in England but there’s no need to spend more than you have to.

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