Edmonton Real Estate Blog

 

Why You Need a Property Title Search


When a real esate agent in Edmonton is working for either a buyer or a seller, a title search needs to be pulled prior to listing a home or writing an offer to purchase to ensure the saleablity of the property.

 

The basic information on a property title will include:

 

  • The current owners name: In the event of an estate sale, probate may or may not have been completed and your real estate agent will ensure the person selling the property does have power of attorney. In the event, there is only one person on the title in a marrige, a dower consent will also be needed to complete the sale.
  • The Legal description: The municipal or mailing address is different from the legal description and includes a block, lot and Plan number.
  • The amount of the last mortgage, any second or third mortages or the original purchase amount at the time of purchase or there may be a nominial fee.

Other things which can be revealed on a property title search may include:

  • Outstanding or owing property taxes, special assessments, delinquent condominium fees which have not been paid by the seller.
  • Outstanding creditors including other finacial institutions and businesses for things like unpaid vehicle loans, furniture stores, construction loans, personal loans, etc
  • A lis pendens, which is normally added by a lawyer during a divorce procedures and "freezes" the transfer of a property until all parties are satisfied.
  • Easements and Liens from a third party, such as the municipality, utility company or Environmental liens, who may have rights to use part of your property.
  • Covenants which are restrictions on the land that can limit what can be built on it, where it can be built and from what materials it may be built. Breaching a covenant can have serious consequences so it is necessary to be aware of any covenants on your property.



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How to use a Comparative Market Analysis

Edmonton real estate agents can provide a comparative market analysis, also known as a CMA, for any property including properties subject to divorce, civil enforcement, foreclosures, estate sales, city tax purposes, etc. It takes time for real estate agents to complete an accurate home evaluation. Unless you have plenty of experience in buying and selling real estate, on-line home evaluations are completely useless .

 

 

When working with sellers, it is used to determine a realistic asking price and when working with buyers is used to check the current market value of a home prior to writing an offer to purchase.

With the exception of new homes, which are usually priced based on economic factors, building quality, reputation of builder, location and price square footage, comparative market anaylsis for

Buyer CMA's are similiar to bank appraisals and are based on the most comparable recently sold properties at the time of the purchase to offer. This includes the known history of the property, lack of permits, real property reports, set backs, etc. It also includes both the condition and location of the property for example whether it backs onto a park or main road and for

A CMA for a seller is used to determine a realistic asking price and consists of several factors. Sellers are based on comparable on market active properties, sold homes, properties which expired and did not sell along with the property history, the current real estate market, supply and demand, the condition of the property, the location, community absorption rate and many other factors.

 

Get your FREE NO OBLIGATION in- home evaluation in Edmonton, Morinville, Bon Accord, Gibbons, St. Albert, Spruce Grove, Beaumont and Devon provided by one of our great Edmonton area real estate agents. Our Remax Real Estate Agents will take the time to help, educate and inform you on all real estate aspects of your community to determine the right value for your home, ensuring you recieve the highest possible price. Simply CLICK HERE to fill in the form and we will get in touch with you shortly.

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Understanding Buyers Brokerage Agreements

Buyer Brokerage Agreements have been around for several years, and only recently has been mandated for real estate agents to have buyers under agreement when working in a "client status". This legal change created security for both consumers and real estates in Edmonton and throughout Alberta. This form states the responsibilities of both the buyer and their real estate agent including...

 



  • The mandated Fiduciary Duties, to protect interests of the buyer
  • The buyer cannot hire more than one broker or real estate agent to represent them
  • The term of the agreement. Depending on the real estate market and how long the real estate agent chooses to work with a buyer, this agreement is normally 30 Days to 1 year and allows enough time for the buyer to purchase a home. If the buyer has not purchased a home during the time frame, they may extend the agreement or sign with another agent.
  • The retainer fee (normally $1000 - $2500) which is held in trust by the real estate agent/broker and forms part of the buyers downpayment.  
  • Remuneration is stated in the agreement and can not be changed without written consent from all parties. This protects the agents commissions and allows the buyer to know how much the REALTOR recieves for their services. (usually paid for by the sellers real estate agent)
  • While under agreement, If the buyer elects to purchase a property without the help of their real estate agent, they will owe the agency the commission set out as per thier Buyers Brokerage Agreement.
  • This agreement also lays out the obligations and duties of the real estate agent ensuring the agency is working in the buyers best interest. Some of these obligations may include
  • Showing you all properties you may be interested in as soon as possible
  • The duation of the agreement
  • Advertising for properties which meet your search criteria
  • Pulling titles to ensure closing capacity
  • Setting you up on Auto-prospecting  
  • Fiduciary Duties of the real estate agent
  • Explaining and helping to prepare the offers to purchase
  • Negotiate favorable terms for the buyer
  • Provide a Buyers CMA to ensure you are not overpaying
  • Inform you on all aspects of your offers including any counters
  • Assist you with choses of mortgage brokers, inspectors, lawyers, etc
  • Any other relevant services you may require

For more information on working under a Buyers Brokerage Agreement, feel free to contact us.

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Real Estate Agents Fiduciary Duties

Real Estate Agents in Edmonton and the province of Alberta who are in an agency capacity for buyer or seller clients, have duties mandated by the legal system called fiduciary duties. The position of the REALTOR® is a fiduciary capacity, acting in the best interests of the client.

 

 

  • Obedience:  Your real estate agent must obey your instructions as long as it is legal and in accordance with your brokerage agreement.
  • Loyalty:  Your real estate agent must be loyal and keep your best interests ahead of those of any other party, including themselves.
  • Disclosure:  In the province of Alberta, the law requires real estate agents, whether in an "agency" capacity or not, to disclose material facts to their client. Material facts are those that, if known by the buyer or seller, might have caused them to change their purchase or sale actions. In a signed agency agreement, your real estate agent must disclose more than the material facts. They must disclose all known or suspected information requrding the purchase of the property.
  • Confidentiality: A real estate agents fiduciary duty of confidentiality means that nothing learned about youcan be disclose including your business, financial, personal affairs or motivations. This confidentiality fiduciary duty must be maintained for eternity.
  • Accounting: Your real estate agent is accountable for all documents and funds in the transaction. Accurate reporting of the whereabouts of all monies pertaining to the transaction and the ultimate disposition. All documents are to be kept for at least six years.
  • Reasonable Care: The words "reasonable care" are only finally fully defined in many cases by a judge or jury when it's too late to change your actions. Most Edmonton Real Estate Agents, as a rule of thumb, go by the ethics code "What we know, you know" when acting in an agency relationship.
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EXTRA HOME COSTS FOR BUYERS

 

Are you ready to purchase your new home? Often, buyers find themselves overwhelmed with the cost of purchasing a home and should be aware of these extra home costs to ensure you won't be struggling at the last moment to find more cash to complete your purchase.

 

When a home is sold, the buyer incurs various closing costs in addition to the property sale price. Although, most of the houses expenses are paid for by the seller, the buyers pays a variety of fees such as mortgage origination charges, title insurance, lawyer, home insurance and property taxes. Depending on the buyer and the home purchased, there may be additional fees including CHMC Fees, which can be added to your mortgage amount and other costs agreed upon and not covered by the seller costs. Don't forget your moving and utlity hook up costs.

 

As a rule of thumb, one to two percent of the cost of your home will cover all closing costs.

 

If you would like to know more about purchasing a home, contact one of our Edmonton Real Estate experts today for help and free advise.

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Should I get title insurance in place of a real property report?

If possible, it is still best to have a current Real Property Report with compliance when buying or selling a home to ensure all property buildings are within the municipality guidelines. If an RPR is not an option, title insurance is a good substitute.

Title insurance without a Real Property Report and compliance is acceptable by most major mortgage lenders and will often provide coverage for the lender for known defects. Unlike other insurance products, there is only one premium paid at the time of closing which provides coverage to the owner throughout their ownership of the property. It also offers a wide range of protection for issues that are not covered by an RPR and compliance.

Title Insurance Benefits include

  • Intervening registrations – Anything registered on title between the time the lawyer submits to the Land Titles Office and the time of actual registration.
  • Unknown Liens, encumbrances, tax arrears or defects in the title to a property.
  • Unknown special assessments on condos that were implemented prior to closing.
  • If an RPR or compliance is not obtained, it covers any defects that would have been revealed by an accurate up-to-date RPR and compliance.
  • Forced removal of an existing structure with the exception of a boundary wall or fence where there is only limited coverage
  • Forced compliance with work orders or deficiencies on an existing building permit.
  • Loss of priority due to matters such as construction liens, agreements on title, and other mortgages.
  • Another party claims an interest in the property.
  • Protection against title defects or encumbrances that were unknown or undiscovered at the time of closing.
  • Protection against identity theft, mortgage fraud, and fraud against the title.
  • Cost savings. Typically, the cost for title insurance is far less than the cost of an RPR and compliance and is available on short notice

Drawbacks of Title Insurance

  • It is an insurance product.  This means when an issue arises, it may not be covered by the policy and if there is coverage the insurer can decide the method used to solve the issue which may not be the preferred choice of the insured party.
  • There is a lack of disclosure and certainty, especially for the buyer, at the time of closing. If an issue is discovered later, it is more difficult to pursue the seller for a fix after closing.
  • There is no coverage for known defects, except for some coverage for the lender only.
  • There must be some form of enforcement or government action to trigger coverage in most cases.  For example, the previous owner did renovations that do not meet the requirements of the building permit or development permit.  The title insurance will only pay for the cost to fix these deficiencies if there is some form of enforcement and not simply due to the deficiencies.
  • It does not guarantee that all structures will remain ‘as is’. For example, if the municipality mandates the alteration or destruction of a certain structure, the title insurance company may pay for the cost of appealing that decision however they cannot guarantee a favourable result.
  • The coverage of Title Insurance is for the buyer only (not the seller).
  • If a buyer or their lawyer purchases a lender only policy that is sufficient to close the deal however the buyer still has no title insurance protection.  
  • There is no specific protection or coverage for the seller.  If a claim is made and the title insurance company determines it is the seller who created the deficiency, the title insurance company can pursue the seller for recovery of the costs they have paid.
  • In most instances, title insurance only defers the need to deal with a particular issue.  It does not solve it.  The issues will still be there when the property is resold.
  • Title insurance cannot be passed onto a new owner.  Every new owner must purchase their own policy.
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Is still possible to purchase a home with a 5% down payment.

 

Investing in Edmonton's real estate market is relatively simple. For a small amount of money down, usually five percent, (plus closing costs) and can own an asset worth significantly more and build your net worth. Your down payment must be from your own savings or a gift from a family member. You cannot use a loan or line of credit.

To use the 5% down payment option, the following rules apply:

The home must be your principal residence - in other words, you will actually live in the home. So if you plan on buying a condominium or other property for residual income, you won’t be eligible for the Canada Mortgage and Housing Corporation’s 5% down payment option.

To calculate your GDS or Gross Debt Service ratio, factor in your monthly mortgage payment, utilitie costs, property taxes and condo fees, if applicable. This number cannot exceed more than 32% of your gross taxable income. Plus, all your consumer debt, loans and housing-related payments cannot exceed 40% of your gross taxable income—this is your Total Debt Service ratio or the TDS.

 

Finally, you must have good credit and a minimum of one year with your current employer. 

 

Once you have your pre-approval completed. Contact a great real estate agent with thier ABR designation and start house shopping!

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How to Avoid Paying Too Much for a House

 

Before you offer any seller a price for a property, there are a few facts you should to know. The asking price of a property does not necessarily reflect the "market value" of the home.


Below are a few questions you should check into prior to making an offer.


- Is the property tax assessment accurate? If not, find out why
- What is the latest real estate trend in that neighborhood? Are real estate prices going up or coming down?
- Have there been any recent drug busts, break and enters or other community crimes you should be aware of?
- How much was the banks property appraisal?
- Is the property staged to avoid any defects?

- Did your REALTOR® complete a CMA (Comparitive Market Anylsis) on your property?

- What is the absorption rate in the community?

 

 

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