BUYING & SELLING TIPS

Terminology

Learn about the various real-estate terms to be more knowledgeable with your transactions

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.

House-hunting suggestions

If you’re thinking of purchasing a home, here’s a few tips to get you started.

Preparing my home for sale

Are you preparing to sell your home? Here are some suggestions for the process.

Smooth moving process

Moving can be stressful – here are a few tips to help you get through it.

Terminology

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.
The number of years it takes to repay the entire amount of the mortgage.
An estimate of a property’s market value, used by lenders in determining the amount of the mortgage.
The increase in a property’s value over time.
The value of a property, set by the local municipality, for the purposes of calculating property tax.
Equal or regular mortgage payments, consisting of both a principal and an interest component.
A real estate professional licensed by British Columbia to facilitate the sale, lease or exchange of property.
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.
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.
Expenses in addition to the purchase price for buying and selling a property.
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.
Shared ownership in a strata-titled property. Owners have title (ownership) to individual units and a proportionate share in the common property.
A first mortgage issued for up to 75 per cent of the property’s appraised value or purchase price, whichever is lower.
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).
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.
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.
A legal document that conveys (transfers) ownership of a property to a buyer.
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.
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.
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.
A legal process by which the lender takes possession and ownership of a property when the borrower doesn’t meet the mortgage obligations.
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.
Payment to the provincial government for transferring property from the seller to the buyer. See Property Transfer Tax.
Any legal claim against a property, filed to ensure payment of a debt.
A contract between a borrower and a lender. The borrower pledges a property as security to guarantee repayment of the mortgage debt.
The lender.
The borrower.
Government-backed or private-backed insurance protecting the lender against the borrower’s default on high-ratio (and other types of) mortgages.
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.
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.
A mortgage that can be prepaid or renegotiated at any time and in any amount, without penalty.
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.
The ability to prepay all or a portion of the principal balance. Prepayment charges may be incurred on the exercise of prepayment options.
The mortgage amount initially borrowed or the portion still owing on the mortgage. Interest is calculated on the principal amount.
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.
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.
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.
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®.
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.
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.
A copy of the title which lists charges against the property, e.g.: liens, mortgages, rights of way, etc.
A statement of a condition to be fulfilled before the contract will become firm and binding; must include a specific deadline for removal.
The legal evidence of ownership in a property.
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.
Examples may include water, sewer and garbage (may include recycling levies).
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.
When sellers use their equity in a property to provide some or all of the mortgage financing in order to sell the property.
Strict guidelines set and enforced by municipal governments regulating how a property may or may not be used.

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.

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House-hunting suggestions

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

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?

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SUGGESTIONS TO 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.

livingroom-interior-design-furniture-indoors

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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.

Suggestions for a smooth moving process

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®.

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