This is a brief outline of buying property in the Salmon Arm area of British Columbia. This is a guide and in no way intended replace a Realtor in the purchase or sale of property. This may be updated and modified as I see fit and is general information only.
When you start your search, you should NOT contact the listing agent. There are new rules in BC regarding agency and conflict of interest. Realtors are not able to “Double End” (represent Buyer and Seller) in BC as that creates a conflict of interest. The listing agent is bound to tell all he knows about potential buyers to his client (the Seller). Likewise an agent is not allowed to represent more that one buyer interested in the same property, this is for your protection.
Buying Property in the Shuswap Area of British Columbia.
Before you start looking at homes here are a few things to know. In British Columbia the square footage of a house is usually all finished portions of the house including the basement. This is not the same as the rest of the country which excludes the basement.
You will be required to make a deposit after your offer is accepted. It should be a significant amount ($5000-$10,000 or more). A seller my ask for more or if the property is in a higher price range. The deposit is usually paid to your brokerage after subject removal and is kept in a trust account for you until closing or, should the deal fall apart, you could receive your money back in some cases.
BC has a Property Transfer Tax (PTT). This is paid by the buyer at the time of purchase. The PTT is calculated as follows: buyer pays 1% of the first $200,000 of the purchase price and 2% on the balance. So, on a home purchase of $450,000 you will pay $2000 on the first $200,000 and $5000 on the balance for a total of $7000.
The Vacant Home tax recently introduced does not apply to this area.
Buying in Rural Areas
If you are looking at property in the rural areas, you may want to be mindful of the ALR. The Agricultural Land Reserve was set up by the government to prevent too much good agricultural land being taken out of production to build houses on. If the Land you are looking at is in the ALR there will be restrictions on it as to subdividing, land use, number of dwellings allowed etc.
Ask your agent, is the property rented to a tenant? In BC the laws state that if you are selling a home that is tenant occupied and you do not wish to continue the tenancy the landlord is required to give the tenant one month notice of the last month's rent. So effectively that is 60 days notice. For example, if you view a property on April 28 and decide to make an offer on it, giving the seller until May 2 to accept. Then the seller would have until May 31 to serve eviction notice on the tenant, thus starting the 60 days, the tenant would have to be out by the end of July. However, eviction notice isn't usually given until after the buyer removes all subjects, so if the final subject removal isn't until June then the seller gives notice by June 30, the earliest the buyer could have possession is the end of August.
Before you make any offers, you need to be sure of what name you want on the title. The Contract for Purchase and Sale lists the buyer's name and that's how the conveyancer has to register the title. So, if John Doe makes an offer on a property, he cannot resister it as John Doe and Nancy Buck. Likewise, if they wish to add their fawn's names or if you wish to put it in a company name those names have to appear on the Contract for Purchase and Sale. If you go to add them after, then you must pay the PTT again. It is written into the contract that the contract may not be assigned to anyone else.
If you are putting it in a company name, then your Realtor must know this ahead of time as it is required to have Fintrac done on the company as well as the directors for that company. Also, the company documents are required.
BC has passed the Land Owner Transparency Act (LOTA). You are required to file a declaration with Land Titles, this is done through your lawyer or Notary. You will have to declare your names, citizenship, country of residency, and address, Date of birth, Social Insurance Number, Tax Number, if it is a Partnership or corporation as well as corporation documents, head office etc. The new legislation is intended to end hidden ownership and make housing more affordable.
It is always a good idea to do a home inspection and if applicable a septic inspection. These will cost you a few hundred dollars, but you will learn things about the home you might not otherwise find out until it's too late and could cost you many thousands of dollars.
Offers and Financing
It is imperative that when you make an offer you are available to your agent. There may be counteroffers or questions that need to be answered in a timely fashion. There are deadlines to meet and if they are not met then the offer dies. You must also be available to remove subjects when the time comes. Also, once the offer is accepted that's when you go to work.
You must arrange financing, insurance and do your inspections before subject removal. And you need to have a lawyer or Notary that can do conveyancing in BC. Not all out of province professionals are able to do that. "Time is of the essence" When you are making an offer remember that you have to do all your inspections arrange financing and insurance before subject removal. It is not advisable to purchase property without doing inspections.
It usually takes a couple of weeks for you to do subject removal. If you are coming in with cash it can go a little faster, but you still need time to do inspections before subject removal. After subject removal it will take at least 10 business days for conveyancing. Land titles cannot be rushed, and they move at their own pace. So, it usually takes a minimum of a month from offer to possession but in some cases longer if the buyer needs to sell another property to pay for the new one or if there are tenants, or various other reasons.
It is beneficial if you can be preapproved by your bank before you start to look at property, then if you see something you like you know if it is in your price range and in a multiple offer situation it is a bargaining chip that can make the difference in an offer. Having said that, just because you are preapproved doesn’t mean you will get the mortgage. More and more transactions collapse because of financing. This can be for a number of reasons, the mortgage rules may have changed, or the banks rules may have changed, or if after you get your preapproval you go and buy a new car. If your work situation changes, you get laid-off, or start a new job can affect your preapproval.
Property use
Another important thing to consider is what is the property being used for now and what are your intentions? When you find that vacant lot, will you be allowed to park your 5th wheel on it for 5 years until you are ready to retire and build your dream home? Not likely! You will need to check zoning for that specific lot as well as check with the building department of the governing jurisdiction.
You may also find out that the site needs extra engineering for slopes, stability or septic. There may be building restrictions on size, use, as well as building code that dictates set backs from property lines on all sides, or riparian areas. There may also be building schemes in a development that restrict the design and finish of a home, whether or not you are allowed to have outbuildings, livestock, home based businesses…. Some city lots don’t allow RV parking, but some allow you to raise chickens.
A good Realtor can get this information for you or direct you to where you can find it. I would recommend that you do some of this yourself, if you’re talking to the planning dept. and questions arise in your mind, you are then in a position to ask them immediately rather than getting the info second hand and your agent going back to ask more questions. People are in those positions to answer your questions. They are happy to do so. When you get the right information from the source you are less likely to have problems later.
Mobile Homes
Mobile Homes are treated differently in BC. All Mobiles must have a CSA sticker and an up to date “Silver Label”. The Silver Label is an electrical inspection that indicates all the electrical system is up to code. Without that label, as Realtors, we are not allowed to list a mobile home. If there has been ANY electrical work done there must be a permit for it and a new Silver Label. Most mobiles are in Parks with their own rules and charge Pad rent that can be $300 to $500+ per month. Occasionally you may find a mobile on it’s own land and you will get title to that land, but usually you are just buying the home and pay rent on the lot. All mobiles in BC are registered in the BC Mobile Home Registry. Some that are modified past a certain point can be de-registered. Since Mobiles are not considered Real Property, they are not eligible for a mortgage. You will have to apply for a loan and banks in BC will not usually loan money on mobiles older than 40 years. If you are looking at a mobile home that is 38 years old, you will not be able to get a 5 year loan. If it is on a lot or land that you are buying then a mortgage is possible.
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