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FREQUENTLY ASKED QUESTIONS

There are some real estate terms I don't understand. Where can I find out what they mean?

Buying a home, whether for the first time or the fifth time, can be a little confusing. This glossary of some of the most common real estate terms that you're likely to encounter will help you better understand the language of real estate.

Adjustment Date: The day from which all calculations of interest, tax adjustments, utility bill adjustments (if applicable) are made to the credit of either the purchaser or the vendors. This is usually (but not always) the same as the possession date.

Amortization: The number of years it takes to repay the entire amount of the mortgage.

Appraised Value: An estimate of a property's market value, used by lenders in determining the amount of the mortgage.

Appreciation: The increase in a property's value over time.

Assessed Value: The value of a property, set by the local municipality, for the purposes of calculating property tax.

Blended Mortgage Payments: Equal or regular mortgage payments, consisting of both a principal and an interest component.

Broker: A real estate professional licensed by British Columbia to facilitate the sale, lease or exchange of property.

Buy-down: When the seller reduces the interest rate on a mortgage by paying the difference between the reduced rate and the market rate directly to the lender or to the purchaser.

Closing: The real estate transaction's completion, when the parties involved agree that all legal and financial obligations have been met and the deed to the property is transferred from the seller to the buyer.

Closing Costs: Expenses in addition to the purchase price for buying and selling a property.

Condominium Common Property, or Common Elements: The portions of a condominium development owned in common (shared) by the unit owners, e.g.: pool, exercise room, lobby, etc. A strata fee is charged to every unit owner for the use of the common property.

Condominium Ownership: Shared ownership in a strata-titled property. Owners have title (ownership) to individual units and a proportionate share in the common property.

Conventional Mortgage: A first mortgage issued for up to 75 per cent of the property's appraised value or purchase price, whichever is lower.

Conveyance: The term used to describe the process of transferring the vendor's title to the purchaser and indicates all the necessary steps to complete the transfer. A conveyancing lawyer is a lawyer (or notary) responsible for the conveyance process (this is normally the purchaser's lawyer).

Counter offer: An offer made by the vendor (seller) back to the purchaser altering one or several terms and/or conditions of the offer as originally written.

Debt Service Ratio: The percentage of a borrower's income that can be used for housing costs. Gross Debt Service (GDS) Ratio is the amount that a lender will permit a borrower to use from his/her gross income in order to qualify for a loan for housing costs, including mortgage payment and taxes (and condominium fees, when applicable). Total Debt Service (TDS) Ratio is the maximum percentage of a borrower's income that a lender will consider for all debt repayment (other loans and credit cards, etc.) including a mortgage.

Deed: A legal document that conveys (transfers) ownership of a property to a buyer.

Easement: A legal right to use or cross (right-of-way) another person's land for limited purposes. A common example is a utility company's right to run wires or lay pipe across a property.

Encroachment: An intrusion onto an adjoining property. Common examples are a neighbour's fence, storage shed, or overhanging roof line that partially (or even fully) intrudes onto your property.

Equity: The difference between the price for which a property can be sold and the mortgage(s) on the property. Equity is the owner's stake in the property.

Foreclosure: A legal process by which the lender takes possession and ownership of a property when the borrower doesn't meet the mortgage obligations.

High-ratio Mortgage: A mortgage that exceeds 75 per cent of the loan-to-value ratio; must be insured by either the Canada Mortgage and Housing Corporation (CMHC) or a private insurer like the Mortgage Insurance Company of Canada (MICC) to protect the lender against default by the borrower who has less equity invested in the property.

Land Transfer Tax: Payment to the provincial government for transferring property from the seller to the buyer. See Property Transfer Tax.

Lien: Any legal claim against a property, filed to ensure payment of a debt.

Mortgage: A contract between a borrower and a lender. The borrower pledges a property as security to guarantee repayment of the mortgage debt.

Mortgagee: The lender.

Mortgagor: The borrower.

Mortgage Insurance: Government-backed or private-backed insurance protecting the lender against the borrower's default on high-ratio (and other types of) mortgages.

Mortgage Life Insurance: A form of reducing term insurance recommended for all mortgagors. If you die, have a terminal illness, or suffer an accident, the insurance can pay the balance owing on the mortgage. The intent is to protect survivors from the loss of their homes.

Multiple Listing Service® (MLS®): A current and comprehensive listing system for relaying property information to the Fraser Valley Real Estate Board's REALTORS®. This service offers the widest exposure to properties listed for sale.

Open Mortgage: A mortgage that can be prepaid or renegotiated at any time and in any amount, without penalty.

Prepayment Charge: A fee charged by the lender when the borrower prepays all or part of a closed mortgage more quickly than is set out in the mortgage agreement.

Prepayment Option: The ability to prepay all or a portion of the principal balance. Prepayment charges may be incurred on the exercise of prepayment options.

Principal: The mortgage amount initially borrowed or the portion still owing on the mortgage. Interest is calculated on the principal amount.

Property Disclosure Statement (PDS): The PDS enables sellers to disclose known defects. If the seller decides not to complete the PDS and does not disclose known defects, he or she is still held liable. The PDS also serves as a checklist for buyers enabling them to address concerns about the property's condition on the spot. The PDS was developed by the British Columbia Real Estate Association.

Property Taxes: This levy is affected by location and is determined by local property tax assessment practice. Tax assessments are conducted by local government. They are paid on an annual basis.

Property Transfer Tax (PTT): Payment to the provincial government for transferring property from the seller to the purchaser. In the 1994 provincial government's budget, the PTT was eliminated for first-time buyers under certain circumstances.

REALTORS®: Real estate professionals who are members of the Fraser Valley Real Estate Board and the British Columbia and Canadian Real Estate Associations. Only these professionals can call themselves REALTORS®.

Rights of Way: Are indicated on title at the Land Title Office; often for use of utilities or city or municipality in order to make repairs to pipes, etc.; no permanent structure may be built on a right of way.

Statements of Adjustments: Closing statements in a real estate transaction which set out the sources of funds which make up the purchase price, adjustments to and from the purchase price, the final amount required from the purchase and the amount due to the vendor. Lawyers will prepare a statement for the vendor and the purchaser.

State of Title Certificate: A copy of the title which lists charges against the property, e.g.: liens, mortgages, rights of way, etc.

"Subject-to" Clause: A statement of a condition to be fulfilled before the contract will become firm and binding; must include a specific deadline for removal.

Title: The legal evidence of ownership in a property.

Title Search: A detailed examination of the ownership documents to ensure there are no liens or other encumbrances on the property, and no questions regarding the seller's ownership claim.

Utility Taxes: Examples may include water, sewer and garbage (may include recycling levies).

Variable-rate Mortgage: A mortgage for which payments are fixed, but whose interest rate changes in relationship to fluctuating market interest rates. If mortgage rates go up, a larger portion of the payment goes to interest. If rates go down, a larger portion of the payment is applied to the principal.

Vendor Take-Back Mortgage: When sellers use their equity in a property to provide some or all of the mortgage financing in order to sell the property.

Zoning Regulations: Strict guidelines set and enforced by municipal governments regulating how a property may or may not be used.

Why should I use a REALTOR®?

It's not likely that you can afford to gamble with the largest single investment you may ever make in your lifetime, namely the purchase of your home. But you may be surprised to learn that some people are willing to take that chance.

Selling a home without the help of a REALTOR® is not as easy as it may appear to the uninitiated. Ask yourself the following questions: Do I know the home's true market value or replacement value? Am I aware of the legal ins and outs? Can I arrange suitable financing? Can I qualify a potential purchaser? Can I negotiate a successful close? Can I write an enforceable contract?

Since today's complex market demands expertise and resources not available to the average consumer, there are many compelling reasons why you should enlist the professional services of a REALTOR®. Consider the following:

  1. Chances are your REALTOR® can get you a higher price for your property than if you tried to sell it yourself.
  2. Statistics prove you will sell your home a lot faster when you use the services of a REALTOR®.
  3. When you work with a member of the Fraser Valley Real Estate Board, you are really working with thousands of REALTORS® who can advise all of their prospective customers and clients about your home through the Board's Multiple Listing Service®.
  4. Your REALTOR® can open doors to thousands of properties in the Fraser Valley alone through MLS® and provide you with an up-to-the-minute computerized list of homes specifically suited to your needs.
  5. Your REALTOR® knows your neighbourhood and assesses market conditions and property values on a daily basis.
  6. Your REALTOR® has been educated on the complex laws and regulations in real estate and is trained to put together a legally binding contract.
  7. Negotiating price is an art. Your REALTOR® will negotiate objectively in order to get the best possible price for your home.
  8. REALTORS® are on call and available seven days a week to show your home.
  9. REALTORS® have the skills and resources to market your home effectively.
  10. Your REALTOR® is aware of the many options available for financing the sale, and has the latest information on mortgages.

If you are serious about selling your home, then you should consider using the experts. REALTORS® are real estate marketing specialists. Let them deliver the professional service you deserve.

What is involved in working with a REALTOR®?

Buying, selling or leasing real estate is probably the most important and potentially rewarding financial transaction you’ll make in your life. So it is a good idea to take a moment and consider the kind of relationship you might be entering into with a REALTOR®. The more you know, the more satisfied you will be with the results. Click here to view more information.

Can I afford to buy?

Many people would like to start building equity in their own home, but are held back by concerns about cost. Media reports of housing prices can give a misleading impression about the cost of home-ownership. The media typically reports median or average prices without explaining the distribution of home prices behind those figures.

A median price is the price at which half the homes sold for more while half sold for less. That means that there are just as many homes that sold at a price lower than the median than those that sold at prices higher than the median price. The median price doesn't give any indication of the spread of these prices. Many properties are sold at much lower - and higher, of course - prices than the median price.

An average price is the total dollar volume of homes sold for a particular period, divided by the number of units sold. Average prices are typically reported for the sales activity in a given area for a given month, quarter or year, and provide a snapshot of past activity. Average prices of properties sold in the past give only a limited indication of what housing inventory for sale is priced at today. An understanding of the housing in a particular community is needed to put average prices into perspective. For example, sales of a new sub-division or townhouse project of larger, upscale homes at higher prices will bring the overall average price up, giving the impression that all housing prices have risen, when in reality, prices for the other housing units in the community have not changed, or they may have even dropped.

The Fraser Valley Real Estate Board was the first real estate board in Canada to offer a housing price index (HPI) which tracks the price of a typical, or benchmark property. HPI statistics can often provide a new depth of interpretation to average and median statistics. Ask a Fraser Valley REALTOR® for details.

Low mortgage rates combined with affordability and selection have made Fraser Valley communities increasingly popular for buyers. A REALTOR® with experience in the community in which you're interested in buying can provide a knowledgeable market analysis and show you what is available within your budget.

To view Fraser Valley properties for sale on the Multiple Listing Service®, point your Internet web browser to www.realtor.ca. For further information, contact a Fraser Valley REALTOR®. You may well find that you can afford that dream of home ownership, after all.

Do you have any suggestions to help with the house-hunting process?

If you're thinking of purchasing a home, you've probably already started looking. You may have seen quite a few homes and the details are starting to become somewhat hazy and jumbled.

Do you remember which one had the ensuite bath and which one had the walk-out basement? How much storage space did the first choice on your list have? Were appliances included in all of the homes you viewed? And what about property taxes and maintenance costs associated with each home? Can you remember how close the home was to local amenities like stores, schools, parks and the hospital? Which one had the landscaping you liked best?

Compiling a house-hunting checklist, as you go through the homes is an excellent way of keeping track of features and drawbacks of each home.

Develop a form for yourself that includes space for all the standard questions like location, asking price, annual property taxes, mortgage terms and any applicable zoning restrictions and includes a checklist of other items that are important to you and your family. Your buyer's agent can help you with this.

Here is a general checklist when viewing the interior and exterior of a home:

EXTERIOR

Jot down your impressions of the exterior of the home, noting the lot size and shape, position of the house on the lot (facing north or south, east or west), and whether it has a private or shared driveway. Also note whether it has a large front, side, and backyard and what condition the landscaping is in and whether there are many mature trees and shrubs.

What type of siding does the home have and what kind of shape is it in? Is it a detached home or half of a duplex? How many stories does it have? Don't forget to jot down whether it has an attached or detached garage and whether it can accommodate one or two cars.

Also note whether there is a porch or verandah, storage shed and whether the yard is fenced. How private is the home?

While still outside, take a good look at the roof and note its general condition and age. Check to see if any roof repairs were made recently. As well, check eavestroughs and down spouts for signs of deterioration and look at the type of foundation the home has. Are there any visible cracks or holes or signs of seepage? You might consider hiring a certified house inspector for a thorough, professional survey — outside and inside — of any home you're serious about purchasing.

INTERIOR

Once you've completed your checklist for the exterior, it's time to move indoors. Make a note of the total number of rooms the home contains.

Check all windows and note whether they are single pane or thermopane. Do they open and close without sticking? What about the doors? Also make a note of their general condition and whether the locks and latches work.

The kitchen is an essential part of any home, so note its general size and colours, whether it has an eat-in area and sufficient cupboard space. Is there a pantry or food preparation island? What condition are the countertops and sink in? Are the cupboards old or new? What shape is the floor in and what is it made of? Is the existing lighting adequate for carrying out kitchen tasks, as well as dining?

Also make sure there are enough outlets to run your appliances. Are the fridge, stove, and dishwasher included with the sale? Are they all operational? Note how many burners the stove has and whether it's gas or electric. Is the oven self-cleaning?

Once you've completed your kitchen checklist, move to the dining room and note its size, whether it's separate from the kitchen and the condition of the floors and walls. Are there any built-in cupboards? Is the chandelier being sold with the house? Take similar notes for the living room. Is there a fireplace? How many windows are there and what are their sizes? Do the window coverings stay when the house is sold?

If the home has a family room, note whether it's closer or adjacent to the kitchen, if it has access to outdoors and if it has a fireplace or wood stove. Is the stove CSA approved? Again, check the condition of the floor or carpet - and look for cracks and other potential problems.

Move on to the bedrooms and note their size and closet space and whether there are any window coverings or adjoining bathrooms. Also note the type of flooring in each bedroom and the colors the rooms are painted.

Make notes on the number and size of bathrooms and the condition of the fixtures. Check all faucets and flush toilets to make sure they are in good working order and to see if there is adequate water pressure. Look for signs of mould and deterioration - sometimes these are warning signs of inadequate ventilation.

BASEMENT

Next, move to the basement. Note whether it is full or partially finished or unfinished. Is there adequate headroom for moving about? Is there a fireplace or wood-burning stove? Also look for signs of moisture - such as watermarks and peeling paint.

Note whether there is a utility area and whether the washer and dryer are being sold with the house. Again, look for signs of water damage.

Find out if any recent renovations have been made to the home. It's also very important to ask about the type of heating, water service, plumbing (copper or other) and electrical amperage. Is the hot water heater owned or rented? Is it gas or electric and what is its capacity? What type of insulation is in the house?

YOUR CHECKLIST SHOULD INCLUDE:

  • 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 are there? How many rooms?
  • What is the condition and age of the roof and are there any leaks or recent repairs?
  • Are there proper roof gutters and adequate downspouts which are properly connected to storm drains?
  • Are the interior walls and ceilings solid? Is there any evidence of leaks or cracks? Is there any evidence of dry rot or termites?
  • Are floors firm and level? What type of floors are beneath the carpeting?
  • Are the room sizes adequate for your needs, including storage areas and closet space?
  • Is ventilating equipment satisfactory? Are there exhaust fans in the kitchen and bathrooms?
  • What kind of heat system is it? What kind of fuel is used? How much does it cost to heat the house year-round?
  • Is there sufficient electrical wiring? Are there adequate outlets in the home?
  • What is the condition of the basement and foundation? Are there severe cracks in or excessive or uneven settlement of the foundation? Is the basement floor dry?
  • What about the attic or crawl space? Is there evidence of leaks? Is there proper insulation/ventilation?
  • What is the condition of caulking on windows and doors? Do they open and close easily?
  • Is the kitchen suitable? Are there enough outlets and space for appliances?
  • What is included in the sale - appliances, etc.?
  • Is there sufficient parking? How large is the garage?
  • Is a property disclosure statement available? This form provides information about the state of the property to all potential buyers.
  • Are there any restrictive covenants, i.e., specific limitations on such things as use, occupancy, exterior finish?
  • What is the zoning on the property, and on surrounding properties? What changes to the immediate vicinity can be expected? Are there any easements, i.e., rights or privileges one party may have to use the land for a special purpose?

What are the documents involved when buying a home?

WORKING WITH A REAL ESTATE AGENT

Buyers and sellers will be presented with this brochure at the earliest contact with a real estate agent. Industry regulations have now made it mandatory for agents to explain at the beginning of the client relationship the options of agency representation you have, and to disclose the capacity in which the agent will be working with you: i.e. as a buyer's agent, a seller's agent, as a subagent to the seller, or as a dual agent. The agent will then ask you to sign a statement acknowledging that this disclosure of agency representation has taken place. He or she will then tear off and keep the signed statement and give you the brochure for future reference.

Signing the disclosure statement in the Working with a Real Estate Agent brochure does not bind you to any obligation to that real estate agent. It merely confirms that you have discussed your agency representation options with the agent. You will have a contractual arrangement with your agent when you sign the listing agreement (as a seller) or the exclusive buyers' agency agreement (as a buyer).

PROPERTY DISCLOSURE STATEMENT (PDS)

The seller is legally responsible for the accuracy of the information which appears on the PDS. The seller indicates his or her knowledge of various aspects of the property, defects of which he or she is aware, and any upcoming expenses (as in special assessments in strata-titled properties).

Not only must the answers be correct, but they must be complete. The buyer will rely on this information when the buyer contracts to purchase the premises. Even if the PDS is not incorporated into the Contract of Purchase and Sale, the seller will still be responsible for the accuracy of the information on the PDS if it caused the buyer to agree to buy the property. The REALTOR® is not permitted to fill out the PDS on behalf of the seller. The buyer receives a copy of the PDS after signing and dating it. The PDS does not cover every aspect of the property. The buyer must still make the buyer’s own inquiries after receiving the PDS. The buyer can hire an independent, licensed inspector.

EXCLUSIVE BUYER'S AGENCY CONTRACT

Many listing contracts for properties listed for sale on the Multiple Listing Service® stipulate the compensation offered to the agent who obtains a buyer for the property. However, some listing contracts do not provide for the remuneration for the buyer's agent. To ensure that they will be adequately compensated for their service to you, some REALTORS® may request that you as buyer enter into a written agreement with them. The remuneration to the buyer's agent will still come from the transaction and will be able to be financed as part of your mortgage. REALTORS® who use buyer's agency contracts feel that this commitment on the part of both REALTOR® and client enables them to provide better service and offer the buyer a wider selection of property from which to choose.

The Exclusive Buyer's Agency Contract outlines the services you will receive from the REALTOR®, and the obligations of both you as buyer and the REALTOR® in the buying transaction.

LIMITED DUAL AGENCY AGREEMENT

This form is used when the agent represents both the buyer and the seller in a single transaction. It is used when the situation involves either one salesperson who represents both the buyer and the seller, or when two salespersons from the same company are involved.

This agreement modifies the prior Listing Contract and the Buyer's Agency Contract (or verbal buyer's agency agreement) and gives the agent the authorization to represent both parties in a limited capacity. It authorizes the agent to maintain both parties' confidences regarding motivation, negotiating positions and personal information (unless either party gives the agent written permission to disclose such information).

CONTRACT OF PURCHASE AND SALE

The Contract of Purchase and Sale standard form is the basic contract signed by the parties (the sellers and the buyers). It outlines every aspect of the transaction, including the price, the terms and conditions, the dates, the inclusions and exclusions, the handling of existing tenancies, the deposit and increase (where applicable) and other legal matters as described in the preprinted contract and added as clauses.

ADDENDUM (WITH PRINTED CLAUSES)

The basic contract will be accompanied by a special addendum form with preprinted clauses where there is either financing to be cleared from the title before the seller can provide clear title, or where there is financing to be put into place after the title is registered in the buyer's name.

ADDENDUM (WITHOUT PRINTED CLAUSES)

The basic blank addendum for is used to write additional clauses on the contract when there is not adequate space to do so on the contract itself. When that has been done, the buyer signs this form indicating that this clause is being removed.

AMENDMENT TO CONTRACT OF PURCHASE AND SALE

This form is used to remove conditions (subject removal) when they have been satisfied, as in the situation where a buyer has to find financing by a certain date.

OTHER DOCUMENTS

Leases

Usually leases are used more in commercial transactions than in residential ones, but you may be a landlord or a tenant who prefers to use a lease for a specified time period for any number of reasons, including stability of tenure. A commercial lease is very involved and should be drawn up by a specialist in the commercial field and reviewed by a lawyer for each party. A residential lease is less complex and normally involves little more than a standard rental agreement with an outline of the rules and regulations of the building or complex, or expectations of the owner and tenant above and beyond what the Residential Tenancy Act sets out. If you have any doubts about how to draw a lease or how to interpret specific clauses, consult a lawyer or a REALTOR®.

Mortgages

Mortgages come in a wide variety of formats, depending on the lending institution. Now, many institutions use a simplified form and make reference to the larger form where any deviations from clauses in their standard form may occur. The buyer should check that the document matches the commitment letter they have signed outlining the terms, including the interest rate, the term, the amortization period, the prepayment privilege ("penalty"), the options (if any) for increasing the number of payments or making lump sum payments, the assumability of the mortgage if the property is sold, and the portability of the mortgage if the seller wishes to use it on another property.

If you are a seller who is carrying financing for a buyer of your property, make sure that your lawyer reviews the documents before you sign them. If you are a buyer who is asking a seller to carry financing, make sure your own lawyer reviews the documents as well. Many serious issues may arise where the parties are unfamiliar with the law concerning mortgage financing.

What are the documents involved when selling a home?

WORKING WITH A REAL ESTATE AGENT

Buyers and sellers are presented with this brochure at the earliest contact with a real estate agent. Industry regulations have now made it mandatory for agents to explain at the beginning of the client relationship the options of agency representation you have, and to disclose the capacity in which the agent will be working with you: i.e. as a buyer's agent, a seller's agent, as a sub-agent to the seller, or as a dual agent. The agent will then ask you to sign a statement acknowledging that this disclosure of agency representation has taken place. He or she will then tear off and keep the signed statement and give you the brochure for future reference.

Signing the disclosure statement in the Working with a Real Estate Agent brochure does not bind you to any obligation to that real estate agent. It merely confirms that you have discussed your agency representation options with the agent. You will have a contractual arrangement with your agent when you sign the listing agreement (as a seller) or the exclusive buyers' agency agreement (as a buyer).

MLS® LISTING CONTRACT

The Multiple Listing Service® Listing Contract outlines the terms of the listing contract, including the length of time for the listing, the price, the commission to be paid, all the parties to the listing, the address and the legal description of the property to be sold, how the seller is to be paid, the preferred possession date, the financial obligations, and other information regarding the property.

The listing agreement is the seller's agreement with the listing agency, not the salesperson individually. If the salesperson leaves that company, it is up to the seller and the listing company to decide whether or not the listing will go with the salesperson, or whether it will stay with the original company and be assigned to another salesperson.

The standard MLS® Listing Contract explains that the seller is liable to pay a commission if the listing agent or a cooperating agent brings an offer which meets all of the stated terms and conditions of the seller.

As with other services, there is GST payable on commission, so when you are calculating your proceeds, take that into consideration.

DATA INPUT FORM

The Data Input Form is the sheet the REALTOR® fills out with all of the information about the property, such as number and size of rooms, lot size, construction type, house style and more. The data is entered into the MLS® database, where other REALTORS® are able to search for specific criteria. As well, this form includes any descriptive comments that will be included for the public websites or private comments, only for other REALTORS®.

EXCLUSIVE LISTING CONTRACT

The Exclusive Listing Contract is used when a property is not going to be on the Multiple Listing Service®. The listing is publicized by advertising and the sign alone, without the benefit of the catalogue/computer. At times, the seller will prefer an exclusive listing in the belief that there will be fewer "lookers," rather than buyers. Actually that is not the case. An exclusive listing is often overlooked by REALTORS® working with buyers, because the first place they look is in the MLS® catalogue/computer. The more people who know about a property, the greater the chance of a larger number of serious buyers viewing the property and making offers until the acceptable price and terms are reached.

LISTING AMENDMENT

A Listing Amendment form is used whenever a change is made to the original MLS® or Exclusive Listing Contract. This may involve extending the date, changing the price, altering wording on the print-out, correcting measurements or tax or financial information, etc. It must be signed by all owners, as on the original listing contract, as well as by the manager of the listing agency.

LISTING CANCELLATION

From time to time a listing is cancelled for various reasons. The Listing Cancellation form used in most areas has a preprinted clause which states that if the property sells within 60 days of cancellation, or before the natural expiry of the listing (whichever comes first), the seller is liable for commission. The reason behind this clause is that, at times a seller may be told by a buyer to cancel the listing so that the seller will not be liable for the commission and the buyer will pay less. This dishonest approach tries to cheat the REALTOR® out of a commission, even though the REALTOR® may have spent hundreds of dollars on advertising and hours at open house and other showings trying to sell the house.

If the seller is very dissatisfied with the service of a REALTOR®, the seller should speak to the manager of the listing agency and outline his/her concerns. The listing agency will make every effort to achieve satisfactory results.

HOLD ACTION FORM

At times, it is necessary to stop the marketing of a property for awhile because of illness or other personal circumstances of the seller. By definition, when your home is listed on MLS®, all REALTORS® have an opportunity to find a buyer for your property. The Hold Action Form communicates your wishes to all REALTORS® who have access to MLS® that you wish to delay the sale of your home.

PROPERTY DISCLOSURE STATEMENT (PDS)

The seller is legally responsible for the accuracy of the information which appears on the PDS. The seller indicates his or her knowledge of various aspects of the property, defects of which he or she is aware, and any upcoming expenses (as in special assessments in strata-titled properties).

Not only must the answers be correct, but they must be complete. The buyer will rely on this information when the buyer contracts to purchase the premises. Even if the PDS is not incorporated into the Contract of Purchase and Sale, the seller will still be responsible for the accuracy of the information on the PDS if it caused the buyer to agree to buy the property. The REALTOR® is not permitted to fill out the PDS on behalf of the seller. The buyer receives a copy of the PDS after signing and dating it. The PDS does not cover every aspect of the property. The buyer must still make the buyer’s own inquiries after receiving the PDS. The buyer can hire an independent, licensed inspector.

LIMITED DUAL AGENCY AGREEMENT

This form is used when the agent represents both the buyer and the seller in a single transaction. It is used when the situation involves either one salesperson who represents both the buyer and the seller, or when two salespersons from the same company are involved.

This agreement modifies the prior Listing Contract and the Buyer's Agency Contract (or verbal buyer's agency agreement) and gives the agent the authorization to represent both parties in a limited capacity. It authorizes the agent to maintain both parties' confidences regarding motivation, negotiating positions and personal information (unless either party gives the agent written permission to disclose such information).

CONTRACT OF PURCHASE AND SALE

The Contract of Purchase and Sale standard form is the basic contract signed by the parties (the sellers and the buyers). It outlines every aspect of the transaction, including the price, the terms and conditions, the dates, the inclusions and exclusions, the handling of existing tenancies, the deposit and increase (where applicable) and other legal matters as described in the preprinted contract and added as clauses.

ADDENDUM (WITH PRINTED CLAUSES)

The basic contract will be accompanied by a special addendum form with preprinted clauses where there is either financing to be cleared from the title before the seller can provide clear title, or where there is financing to be put into place after the title is registered in the buyer's name.

ADDENDUM (WITHOUT PRINTED CLAUSES)

The basic blank addendum for is used to write additional clauses on the contract when there is not adequate space to do so on the contract itself. When that has been done, the buyer signs this form indicating that this clause is being removed.

AMENDMENT TO CONTRACT OF PURCHASE AND SALE

This form is used to remove conditions (subject removal) when they have been satisfied, as in the situation where a buyer has to find financing by a certain date.

OTHER DOCUMENTS

Leases

Usually leases are used more in commercial transactions than in residential ones, but you may be a landlord or a tenant who prefers to use a lease for a specified time period for any number of reasons, including stability of tenure. A commercial lease is very involved and should be drawn up by a specialist in the commercial field and reviewed by a lawyer for each party. A residential lease is less complex and normally involves little more than a standard rental agreement with an outline of the rules and regulations of the building or complex, or expectations of the owner and tenant above and beyond what the Residential Tenancy Act sets out. If you have any doubts about how to draw a lease or how to interpret specific clauses, consult a lawyer or a REALTOR®.

Mortgages

Mortgages come in a wide variety of formats, depending on the lending institution. Now, many institutions use a simplified form and make reference to the larger form where any deviations from clauses in their standard form may occur. The buyer should check that the document matches the commitment letter they have signed outlining the terms, including the interest rate, the term, the amortization period, the prepayment privilege ("penalty"), the options (if any) for increasing the number of payments or making lump sum payments, the assumability of the mortgage if the property is sold, and the portability of the mortgage if the seller wishes to use it on another property.

If you are a seller who is carrying financing for a buyer of your property, make sure that your lawyer reviews the documents before you sign them. If you are a buyer who is asking a seller to carry financing, make sure your own lawyer reviews the documents as well. Many serious issues may arise where the parties are unfamiliar with the law concerning mortgage financing.

Do you have any suggestions to help me prepare my home for sale?

Are you thinking of selling your home? If you're one of the many homeowners who choose this time of year to move — whether you're trading up or down, or simply relocating — you're probably starting to prepare your home for the sale.

Before you become overwhelmed by the task, it's a good idea to sit down and look at your home objectively. An attractive, well-kept home generally has a better chance of selling a little faster. Also, the old adage "first impressions are lasting ones" is very true.

If you haven't made substantial improvement or changes over the years, it's not a good idea to take on major renovation projects simply to sell your home. This can be an expensive and lengthy procedure and there are no guarantees that you'll be able to recover all of your costs.

Instead, try to determine what types of minor cosmetic improvements can be made, like general cleaning, painting, floor refinishing, and so on. These projects generally don't require a lot of capital and your home can be greatly improved by them. Consult with your REALTOR® to see what types of improvements make the most sense.

Start with the outside

An inviting exterior ensures that potential buyers will inspect the interior, so it's important to keep your lawn and hedges trimmed and edged, the flower beds cultivated, and your yard free and clear of clutter and refuse. If you have any loose siding or pavement, it's a good idea to get these items repaired. And it you have any cracked or broken windows, get them fixed as well.

Missing shingles or eavestroughs should also be replaced and loose shutters or awnings secured. You may also want to consider painting the exterior of your home to spruce it up a little. And if you have aluminum or vinyl siding or trim that's quite dirty, hire someone to clean it with a power washer, if you can't or don't want to wash it yourself.

If you have a garage, make sure the door is clean, attractive and in good working order. Also make sure the inside of your garage doesn't look too cluttered or unorganized. Keep patios, walkways and decks free of debris and clutter.

The inside story

You can do a lot on the inside of your home as well without spending a great deal of money. Two primary areas to keep in mind are the kitchen and bathroom. These two rooms of your home are generally of prime interest to potential buyers. Make sure they're clutter-free, bright and spotless. This applies to kitchen appliances as well, especially if you're including them with the sale of the home. Scrub sinks, toilets, bathtubs and kitchen appliances until they shine.

If the carpeting in your home looks dirty or dingy, you may want to rent a steam cleaner, or hire a professional carpet cleaner. Pet odours become trapped in rugs and this can repel prospective buyers.

Give your home a thorough cleaning and if you've been cooking, ensure you air the home prior to its showing. Make sure any wood and tile floors look clean and bright, not dull and dingy. Get to those easy-to-miss spots that need a good cleaning. Wash down the walls, windows and woodwork. Clean out the cupboards and under the sink, dust the tops of baseboards and wash all window coverings.

As well, keep in mind that rooms that are too cluttered will give the impression that they're much smaller than their true size. Try to create a feeling of spaciousness when conducting your spruce-up. Pack away bulky or unused furniture and make the best use of your space. Be ruthless when you go through closets, spare rooms and cupboards. If you haven't used that bread-making machine in a while, and if you're not likely to need that extra set of china in the next few weeks, pack it away. Those knick-knacks on the mantelpiece may have sentimental value to you, but they'll just look like knick-knacks to the people who come through your home. Take a deep breath and move them out of sight. You can get a head start on packing by cleaning off bookshelves, and clearing away out-of-season clothes, toys, bedding, sports equipment and garden tools.

Now is the time to fix the cracked light-switch plates, broken door handles, leaky faucets and squeaky doors you've learned to live with for years.

Shabby corners and grubby entranceways will benefit from a fresh coat of pain in a neutral colour - this is not the time to start experimenting with dramatic paint schemes. Similarly, heavily patterned wallpaper or brightly coloured accent walls may tend to distract buyers from other features, or make it hard for them to imagine how their belongings will look in the room. If you can, repaint or paper the walls in a subtle colour.

Pre-showing checklist:

  • Whenever possible, try to be out of the house while the REALTOR® is conducting a showing. (Potential purchasers often feel like intruders when homeowners are present.)
  • Keep pets well out of the way — preferably out of your house during the showing. (Potential purchasers who are afraid of or allergic to pets will not wish to view your home.)
  • Make sure your home is tidy and well aired. Ensure that every room is adequately lit.
  • Remove any items (like chandeliers) which won't be included in the sale of the home.
  • Don't keep money, jewellery and small valuables in plain sight during a showing.

Ask your REALTOR® for his or her checklist to better prepare you for a showing or open house. By following these relatively simple tips, you'll feel proud of your home and potential purchasers are sure to appreciate its beauty.

Do you have any suggestions to make the moving process go smoothly?

6-8 Weeks Before "Move-Out Day"

  • Create a "move information" file; store important information checklist, and receipts for moving-related expenses.
  • Contact your insurance agent to transfer property, fire, and auto insurance.
  • Organize dental & medical records; be sure to include prescriptions, eyeglass specifications & vaccination records.
  • Wills, stock certificates & other one-of-a-kind items (jewelry, photos, home videos) are difficult or impossible to replace. Plan to carry them with you instead of packing them.
  • Research childcare options in your new location. Arrange for transfer of school records for yourself or children.

4-6 Weeks Before "Move-Out Day"

  • Take an objective look at what you own, and decide what must go and what can be sold, donated to charity, or otherwise disposed of it before your move.
  • Get your mail moving. Your post office will have change-of-address cards to help you with this task. Don't forget to give forwarding address to old employer, lawyer, accountant, etc.
  • Since you will want to have your utilities (electric, gas, phone, etc.) still connected on moving day, arrange to have them disconnected from your present home after your scheduled move-out.

3 Weeks Before "Move-Out Day"

  • Start packing, remembering to label your boxes. Set aside items you'll need immediately after you move (medicines, change of clothes, toiletries, etc.)
  • While you are sorting through your belongings, remember to return library books and anything else you have borrowed. Also remember to collect all items that are being cleaned, stored or repaired.

2 Weeks Before "Move-Out Day"

  • Clean and clear your home including closets, basements and attics.
  • Dispose of flammables such as fireworks, cleaning fluids, matches, acids, chemistry sets, aerosol cans, paint, ammunition and poisons, such as weed killer.
  • Drain all the oil and gasoline from your lawn mower and power tools to ensure safe transportation.
  • Plan meals that will use up the food in your freezer.
  • Call your bank to find out how to transfer your bank accounts. Don't forget to clear out your safety deposit boxes.

1 Week Before "Move-Out Day"

  • Pack your suitcases and confirm any personal travel arrangements (flights, hotel, rental cars, etc.) for your family.
  • Start cleaning your current premises. Empty, defrost, and clean your refrigerator and freezer, and clean your stove, all at least 24 hours before moving to let them air out.
  • Back up your computer files before dissembling and packing your system.
  • Prepare a "Trip Kit" for moving day, containing the things you'll need while your belongings are in transit.

"Move-Out Day"

  • Stay in your home until the last item is packed.
  • Make a final inspection before you sign any paperwork (Inventory, Bill of Lading, etc.).
  • Do a final walk-through of your old residence, check closets, drawers, lights, lock all doors & windows.
  • Clean premises one final time.
  • Return keys to your landlord or your REALTOR®.

What is PTT and what other taxes are charged on a property purchase?

Property Transfer Tax (PTT) is a registration tax that applies to all property transfers and is paid to the Government of BC. The tax is 1% on the first $200,000 and 2% on the remainder. First-time home buyers may qualify for an exemption, depending on the purchase price of their home. Link to a detailed booklet is here.

On April 1, 2013, the 12% Harmonized Sales Tax (HST) in BC was replaced by the 5% federal Goods and Services Tax (GST). The GST applies on the purchase of a new home after March 31, 2013. In addition, a 2% BC Transition Tax may apply to the purchase of a new home where construction or substantial renovation is at least 10% complete as of April 1, 2013, and ownership or possession of the new housing transfers before April 1, 2015. The 2% BC Transition Tax does NOT apply to sales of vacant land, new commercial units or REALTOR® commissions. The 5% GST is also paid on services relating to the purchase or sale of a home, such as commissions, moving costs, appraisals and legal fees.

What is the MLS®?

The MLS® system, also known as the Multiple Listing Service® is a complex information-sharing and cooperative marketing network created by REALTORS® several decades ago to help the public buy and sell homes. The MLS® system provides REALTORS® with access to much more detailed information than you'll find on a website. MLS® information will include room-by-room measurements and specifics on the property condition, renovations, property zoning and rental rates. Through the system, REALTORS® can also access the sales history of a home in order to see how many times it has changed hands and at what prices. The Multiple Listing Service® or MLS® is a member-based service, paid for by the REALTOR® members of the local real estate Board.

How do I become a member of the Fraser Valley Real Estate Board?

The first step to becoming a member of our Board is to become a licensed real estate representative in British Columbia. Details on that process can be found at the Real Estate Council of BC website.

Once you are licensed, you will need to find a brokerage (real estate office) to work with. Usually, your new manager will have all the information and forms you will need to apply for membership with our Board.

The initial membership fee for a new member is $550 plus HST, and includes membership in the BC Real Estate Association and the Canadian Real Estate Association. Only members of the Canadian Real Estate Association can refer to themselves as REALTOR®.

Membership benefits include access to the Multiple Listing Service®, networking opportunities, newsletters and other industry communications, leading-edge marketing and technology tools, arbitration services and educational opportunities.

Our members abide by a national Code of Ethics and Standards of Business Practices as well as our Rules of Cooperation. Members actively dialogue all three levels of government and support local law enforcement through the Realty Watch program.

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