When you decide to sell your home, one of the documents required to have ready is your Real Property Report. First of all, I'd like to define Real Property Report and highlight it's importance when selling.


What is a Real Property Report? (RPR)


A Real Property Report is a legal document that clearly illustrates the location of significant visible improvements relative to property boundaries. The key word is improvement. 

Improvement

The word “improvement” refers to any visible structure of a permanent nature, constructed or placed on, in, or over land. Improvement does not include structures that have been taken away. Although you and I may agree that taking away a rotting deck will certainly look better than it staying!

Municipal Compliance 

City of Calgary - The RPR need to have a Stamp of Compliance from your municipality confirming your building locations and that you comply with the land use bylaw.  

A Certificate of Compliance is a confirmation from The City of Calgary that the locations of structures on a property comply with the Land Use Bylaw. This is confirmed on a Real Property Report prepared by an Alberta land surveyor. It does not regulate or enforce any building code requirements or serve as a confirmation of permit history on a property.

A Certificate of Compliance is not a comprehensive bylaw review. The following items are not reviewed for compliance:

  • Fences*

  • Retaining walls*

  • Driveway width

  • Parcel coverage

  • Building height

  • Accessory residential buildings less than 10 m2 (sheds, pergolas, etc.)*

  • Alberta Building Code requirements

*All built structures will be reviewed for encroachments onto City property.

A Certificate of Compliance is usually required by lending agencies or lawyers in the sale of a property and/or mortgage approval to protect their clients' investments. Standard real estate purchase contracts often require the vendor to obtain a compliance certificate. A Certificate of Compliance is not a legislative requirement, but rather a service provided by The City of Calgary. The City does not require you to get a compliance certificate.


Non-Conformance and Relaxations

City of Calgary - A Real Property Report that shows structures that are non-compliant with the Land Use Bylaw will result in a refused compliance. When this occurs, consider the following:

Remove the non-compliant structure

If the non-compliant structure is a minor issue, it may be easiest to remove the offending structure. This option depends on the feasibility of removing the structure and the importance of that structure to the sale. If a structure is removed and the survey is updated to reflect the change, submit the update within six months of the original and compliance fees will be waived.

Apply for a relaxation

development permit for relaxation of Land Use Bylaw rules is another option. After the refusal, the applicant submits color pictures of the non-compliant structure, the Real Property Report and the applicable fee. See the requirements list for relaxation of an existing structure. Relaxations are not guaranteed, as they are evaluated on a case-by-case basis. Every relaxation presents unique variables and impacts on the surrounding community. Affected parties have an opportunity to provide input.

Compliance is not always required

Sales, leases and other agreements often require a Certificate of Compliance for the protection of interested parties, but this is done as a private condition between those groups. The City offers compliance as a service only, and does not intervene in private transactions.

Even if a non-compliant structure existed before you owned the property, it may still impede compliance. Real property reports represent the property at the time of survey.


The Purchase Contract


When you receive a purchase contract you will need to review the Closing Process. In this section you will be required to supply closing documents which will include the RPR and the Buyer/Buyer's Lawyer should have time to review this document. It is in everyone's best interest you have the RPR prepared prior to your sale. Then if an issue arises, you can choose to remove the issue, negotiate the issue in your offer (which comes with finding a buyer that will be willing to accept your issue), or, apply and pay for a relaxation with the city. 

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If you follow real estate you have probably read the term “Guaranteed Sale”. I decided to write about this topic because I feel it is a conflict of interest between industry members and the public.

 

What is a Gauranteed Sale?  It is when a Realtor®/Brokerage offers to buy your home at a huge discount if they cannot sell it on their own. If using industry specific terms in advertising, industry professionals must present the information in such a way that the consumer will have a CLEAR understanding of what the advertising means.

 

Bait and switch tactics.  Doesn’t it seem odd that if a realtor® is offering to buy your home, that everyone should just be selling their home to their realtor®? Industry members are not allowed to communicate an offer just to get a foot in the door only to substantially restrict the offer during their meeting.

 

Conflict of interest means a real or obvious incompatibility concerning an industry professional’s interest and the interest of the client or potential client. The test to determine if a conflict of interest exists is to take an objective viewpoint. If a reasonable person concludes the industry professionals’ judgment, advice or loyalty to the client may

have an adverse effect on the client - this would be a conflict of interest.If a realtor is offering to buy your home at a huge discount, who’s best interest do they have in mind? How can they act in your best interest if they may have to buy your home or want to buy your home.

 

My assumptions on Guaranteed Sales is that the Realtor® cannot possibly be representing the public in good faith without a conflict of interest. The only reason a Realtor® is marketing Guaranteed Sales is for you to call! They have either no intention of ever buying your home (so reduce, reduce is their mantra), or their intention is to buy your home at an excellent discounted price! Either way, this has nothing to do with your best interests!

 

How is a price determined? Taken from Realtor's website for Calgary and AREA who practices Guaranteed Sales. 

"We look at comparable sales in your community to determine the fair market value of your home. From that a percentage up to around 10% is taken off the net amount that you would receive if you were to sell in today’s market.

For example, if your house is valued at $400,000 we subtract real estate commissions and then a percentage up to around 10% is taken off that amount giving you a net guaranteed sale amount. In this case, the guaranteed sale amount would be $345,600. The percentage that is up to 10% is solely based on the property’s location and current market trends and conditions."

The key to this example is that she hasn't told you how they determine VALUE. It is not based on what you feel your home is worth, nor is the VALUE based on the list price. And there are always 3 parts of VALUE;  high, mid a low. I can ensure you the VALUE will be determined as LOW!

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Do you remember the old Alberta saying:

"Please God, bring another oil boom, this time we promise not to piss it all away."

 

Well, when you see Calgary's real estate market down like this, it is just yelling opportunity for the next big housing market. Right now we are 19% below Calgary's long term averages. Do you really think that will go on forever? NOT!

This is a year of opportunity for many of you who may want to buy your first home, or invest in another. It is the time to start planning. Speak to your mortgage representative, seek out your real estate representative, talk to your accountant.I am trying to show you the chrystal ball!

 

The Alberta government is stating "The Alberta economy is expected to expand modestly in 2017, driven by oil and manufacturing exports, public sector infrastructure spending and reconstruction in Fort McMurray. After declining an estimated 2.8 per cent in 2016, real GDP is forecast to grow 2.4 per cent in 2017."

 

Conference Board of Canada "Alberta should post Canada's fastest economic growth this year as the energy industry improves and consumer spending picks up, a Conference Board of Canada report says."

 

The Huffington Post Alberta | Michelle Butterfield | Posted 01.11.2017 | Canada Alberta ... Alberta's Economy Is Set To Grow Faster Than Any Province Next Year.

 

It’s good news for Alberta – the worst appears to be over.

That in a new TD Economics report that shows our province will lead the country in GDP growth over 2017 and 2018, thanks to oil production ramping back up.

 

I am listing all of these articles to show you that this is the time to get ready, start! Or you will miss Alberta's next biggest real estate opportunity.

 

Read more about CREB's February statistics package for the Greater Calgary AREA - http://tinyurl.com/h9y8xf5


Call a Greater Calgary Realtor today and get them working hard for you!

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Here are some hard numbers to be aware of for the Calgary market.

 

1. There is a 10% unemployment rate in Calgary
2. Alberta's manufacturing industry is tightly knit to Alberta's Oil Industry
3. Calgary had an net out migration of 6,000 people and it is expected more in 2017.
4. In 2015 there was a 26% contraction, 2016 was 6% for sales
5. Listings are declining, that's positive. She says this is helping the market stay stable.
5. New home sales are in decline
6. Lots of multi family under construction making apartment inventory on the rise
7. Apartments not even adjusted with inflation are lower than 2007 levels. This will not stabilize this year.
8. The peak drop, from 2014 to now, for apartment condos is expected to be at 11%, Semi detached at 5.5% and detached homes at 4.7%.
9. 60% of our MLS sales are detached homes, this will be our only somewhat stable sector.
10. CMHC says Calgary
purpose built apartment vacancy rate is over 7 per cent, the highest it has been in over 25 years.


On a potential good note, the Calgary Real Estate Board is witnessing 7 homes a day coming off the market due to

terminations alone. This could lessen supply and increase demand if these properties are not added back to the

resale market.

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Just finished a home inspection that brought up a major issue. The in-floor heating system in the basement was distributed with a tubing called Kitec. Definition "Kitec plumbing consists of flexible aluminum pipe between an inner and outer layer of plastic pipe (PEX pipe) with brass fittings. Marketed as a cheaper and easy-to-install alternative to copper piping, Kitec was sold between 1995 and 2007 for potable water, in-floor, and hot-water baseboard heating systems." This includes homes in Alberta. 

 

It turns out that this company is in the middle of a class action lawsuit in Canada and the US. http://www.kitecsettlement.com/

 

 

I mention this mainly because I feel this should be considered a defect that should be disclosed by the Seller, but it just doesn't seem to be happening. This is an expensive fix! Alberta's listing contracts state that you must disclose in writing if there are any defects that would be expensive to fix. This is definitely an expensive fix, and it causes Buyer's to pay around $500 for a home inspection to find this out. In the meantime, the homeowner should have disclosed it at the time of the offer. 

 

Sadly, a Buyer may buy this home not knowing of the Kitec issue, maybe not wanting to have a home inspection done by a qualified home inspector or having an inexperienced home inspector. 

 

There are so many other issues that one should be made aware of when buying a home. Using qualified professionals can help save you thousands in the future. 

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Data supplied by CREB®’s MLS ® System. CREB® is the owner of the copyright in its MLS® System. The Listing data is deemed reliable but is not guaranteed accurate by CREB®.
The trademarks MLS®, Multiple Listing Service® and the associated logos are owned by The Canadian Real Estate Association (CREA) and identify the quality of services provided by real estate professionals who are members of CREA. Used under license.
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