Components of a Real Estate Contract

Legal Description

A Bc real estate contract contains the terms agreed upon between a buyer and seller in a real estate transaction. The buyer and seller must sign this document to make the deal official.

The document contains important details that must be completed correctly in order to ensure a successful transaction. It includes a legal description of the property, which is based on information from the land title office records. It also has a Parcel Identifier (PID), which is a nine-digit number that uniquely identifies the parcel of land within the land title registry in BC.

In addition, the legal description of the property includes the street address, city or town it is located in and the postal code. This information is crucial for ensuring that both parties are purchasing the exact same property.

Another section of the legal description describes any encumbrances on the property, which is a legal restriction that limits the owner’s ability to use the property. These include liens on the property, a mortgage or other monetary claim.

Several other clauses are included in the legal description, including a statement of conditions and a completion date. These clauses allow for the seller to cancel the offer and take back their deposit if they don’t complete by the stated completion date.

Purchase Price

The purchase price is the amount of money that a buyer promises to pay for a home. This amount will include any additional fees that the seller has agreed to pay and taxes on the property. It will also include a good faith deposit that is paid to the buyers agent.

It can be difficult to determine the final purchase price of a home because the prices fluctuate from time to time due to different circumstances and factors. This is why it’s important to consult with a real estate expert.

Typically, the purchase price is determined by an estimate of the fair market value. This is based on local housing values, the property’s condition, and other considerations.

There are some factors that can affect the purchase price of a property in BC, such as tax exemptions and rebates. For instance, a buyer may qualify for an exemption or reduction in BC’s Property Transfer Tax (PTT).

Another thing that can affect the purchase price of a home is the seller’s ability to pay the GST. This tax is charged at a rate of 5% on the purchase price of a home.

If the buyer is a non-resident, they may have to provide a holdback of a portion of the sale price. This is because they might owe income taxes on the property in their home country or might have to pay capital gains taxes on the proceeds of the sale.

Financing

Buying real estate in BC can be expensive, but there are several options for financing. Whether you are purchasing a single-family home or a multi-unit property, there are various mortgages available to help you get started.

If you are a first-time buyer, you may want to consider a government-funded loan program that can help you buy a home without the stress and burden of saving for a down payment. There are also loan directories that can help you find the best lenders and rates in your area.

The price of housing in BC has increased significantly over the past decade, with condos and detached bungalows seeing the biggest gains. In Vancouver, for example, the average condominium price rose 60% over 10 years, while detached bungalows grew by nearly 60%.

New mortgage lending rules in Canada require buyers to provide at least a 5% down payment on homes that cost less than $500,000. If the home you’re looking for costs more, you’ll need a much larger down payment.

Closing Date

When you buy a house in BC, the closing date is the date when you take physical possession of the property and hand over your purchase price. It’s important to understand what happens during this time, so you can plan ahead for your move and avoid any potential problems with your new home.

This part of the real estate transaction is handled by your lawyer and a notary public. It involves the transfer of title to the seller, and usually includes a number of other documents and procedures.

The standard deposit amount in the Vancouver real estate market is around 5% of the initial asking price. The buyer can offer more than this if the property is priced above the market average, but it’s still an important factor to consider when making an offer.

A deposit is an important aspect of a real estate sale, and both parties need to ensure that it’s transferred to the other party in a timely manner. This is particularly true if the deposit is made by wire transfer.

Once the deposit has been received, the buyer’s lawyer will complete a Trust Cheque to the seller in the amount of the purchase price. The buyer will then arrange to obtain the keys to the property and perform a walk through.

This process can be long and stressful for buyers, but it’s essential to make sure that everything is taken care of before you receive the keys to your new home. Don’t forget to give notice to utilities and cable companies so that you don’t have any surprises when it comes time to move in.

Settlement Date

The settlement date is the day on which the property’s ownership officially changes hands from the seller to the buyer. This can take place in the office of a title company, lender or attorney. This is also the date on which all relevant paperwork is completed.

The seller typically chooses the settlement date based on their own personal preference, as well as how long it will take them to move out of the home. However, the buyer’s mortgage lender will usually have a say in settling on a date that ensures they have time to complete the necessary underwriting process and meet all their financial obligations.

A buyer can cancel the contract if they decide it’s not right for them within three business days after the offer is accepted in writing, called the cooling-off period. This applies to most residential real estate sales in BC.

Another thing to keep in mind is that your lawyer and notary public will use a date on your purchase contract called the adjustment date to make adjustments to the amount of property taxes and strata fees the parties will each have to pay. This can occur at the same time as the completion date (depending on when they work) or it may be a few days after that.

You should bring a copy of your purchase contract with you to the closing table. The lawyer or notary will review the contract to make sure it is in order and that the documents have been signed correctly. They will also ask you to show your ID.

Appraisal

An appraisal is an unbiased evaluation of the market value of a property. It is a common requirement for home sales and mortgage refinances, as well as less common situations like divorce or estate proceedings.

Appraisals are typically done by licensed appraisers who are trained and experienced in evaluating real estate properties. They take a variety of factors into account, including the physical condition, amenities and location of a property.

Lenders, real estate investors, taxing authorities and insurance companies all rely on an accurate valuation of a property to do their job effectively. They use the appraised value to determine loan amounts and Loan-to-Value Ratios, as well as to make annual property taxes.

A good appraisal will be based on facts that support the appraiser’s conclusion, and it should include detailed information about the property and comparable homes in the area. It is important to review the report closely and make sure that all of the details noted are accurate. If the appraisal includes inaccurate data, you may be able to dispute it with your lender and have it corrected before it is used again.