A. Classification of House on PEI

Most of the houses in Canada as well as on PEI are classified as:

  1. House: 
    • Single house: A single house not attached to any other dwelling or structure, some houses its own garage or double-garage. A single-detached house has open space on all sides, and has no dwellings either above it or below it. Called a carport if it has only a roof.
    • Duplex: A duplex house has two living units attached to each other, either next to each other as townhouses and each unit has a different address.
    • Triplex: A triplex house has three living units attached to each other.
    • Fourplex: A fourplex house has four living units attached to each other.
  1. Townhouse: They are often rows of uniform homes and very common in cities. it is a single family home that shares one or more walls with other independently-owned units, some townhouses have its front yard, backyard. An old model townhouse usually has not garage or carport
  2. Condominiums: a type of apartment.
  3. Rental Apartment: A living unit for rent. It might be a unit inside a rental condominium or a unit belonging to a duplex, triplex or fourplex.

B. Need to know before buying a house on PEI.

In Canada as well as in PEI, everything related to houses is completely different from the practical-market and regulations of buying and selling houses in Vietnam. 

Somethings should be paid attention:

  1. School registration: In PEI, students from Kindergarten to grade 12 should be registered to school as a residential address. Therefore, if you want your children to study at a loved school, you should move your home to its community. All schools have their school bus for transportation.

Parents can check which school students will attend and school bus routes.

Zoning and Transportation

  1. Age of house: Houses in Canada and particularly in PEI have a high age, many houses have been built for decades, sometimes hundreds of years ago. However, the quality of the home depends on how the house is maintained. There are houses many years old but upgraded every year by the owner, when you step in you cannot even recognize the age of the house. Houses built decades ago often use high quality natural materials such as bricks, solid-wood, etc., so they are very durable.

Depending on your interests and needs, ask all the information you need to ensure you buy a home you love. It is best to take the place to look at the house instead of just looking through the pictures.

  1. Structure of house: Pay attention to the extra functions of the house such as garage, deck, fence … to ensure all your needs and your family are fully met.
  2. Prices: The price of a house in PEI is based on several criteria such as the number of bedrooms, the number of bathrooms, the total finished area, the age of the house, the garage or not, the location of the house. So the two houses look similar but can have different prices. Put your priorities first to buy a satisfactory home.

C. Steps to buy a house in PEI

  1. Finance
  2. Realtor
  3. Listing needs to Realtor
  4. Finding houses
  5. Deposit
  6. Inspection and Insurance
  7. Legal and payment
  8. Taxes and other fees

Contents:

  1. Financial plans

Buying a large asset is one of the most important steps of financial preparation. Normally, banks in PEI have different lending policies for different types of customers. Therefore, unless the buyer has enough cash to pay once when buying a house, it is advisable to work with the bank to confirm the mortgage. Banks often classify subjects with Permanent Resident, Work Permit, International Students, and Visitor into different target groups to have separate policies for each group. Because each bank has different policies, buyers should work directly with the bank, ask a few banks to build the best financial plan.

  1. Realtor:

Unlikely in Vietnam, A real estate agent is a person licensed practice in Canada (Realtor). Buyers can find and select Realtors on these real estate for sale pages online, in community or through referrals. Canadian law allows you to work directly without a Realtor, but buyers should find their own Realtor for the following benefits:

  • Buyers do not have to pay fees for the Realtor, according to the regulations, the seller-realtor and the buyer-realtor will negotiate commission shared ratio. In PEI, the commission charged by the seller is up to 5% of the value of the house. If you do not hire a Realtor for you, the seller-realtor will receive the full commission.
  • Realtor will listen to the needs of buyers and find the right house according to needs. You save time for searching.
  • Realtor will be responsible for working with the seller-realtor to find out information about the property which you intend to buy.
  • Commonly, buyers must make an appointment or ask their Realtor to make an appointment with the seller-realtor to see the property. In Canada, you should not go to see houses when you see signs of selling houses on their doorstep or see them posting online. Unless they post “Open house”, you can come and see without an appointment.
  • Realtors can perform several duties that the general public can not.
  1. Listing needs to Realtor

After finding the Realtor and giving requests, ask the Realtor to find a satisfactory house. Depending on the abilities of each Realtor, the way to introduce the house will be different. Realtors are responsible for providing complete information about the house you are planning to buy, including finished points and unfinished points, the history of the house, information of urban planning of the house (e.g. unused land can be developed or not), the legal status of real estate (in Canada, there are many houses built on rented land, so the value of the house for sale is cheaper because it doesn’t include the land price, but the cost will vary every month).

Specific requirements should be given to the Realtor: such as desired house location, number of bedrooms, type of house (single, duplex), purchase amount and other information (e.g. purchase for rent, live or combine).

  1. Finding houses

Based on the financial plans in the previous step, the buyer and / or Realtor will find houses with prices matching the buyer’s financial plans.

Finding a house has many ways:

Search for information on real estate sites:

www.realtor.ca

www.point2homes.com

www.royallepage.ca

https://www.century21pei.com

https://www.zolo.ca/

Search directly in the area of interest.

Friends introduced.

Online channels and groups on social networks like Vietnamese Association on PEI.

  1. Deposit

After viewing the house, both parties agree the prices through Realtor, they will sign a deposit agreement, the agreement has the following basic information:

  • Buyer
  • Seller
  • Address of the property which you want to buy and the prices of the property.

Deposit: about 1%, but can also be 5,000 ~ 10,000 CAD depending on the two-party agreement.

This deposit agreement will set an average day of 2 weeks to 2 months depending on the agreement on the fulfillment of the attached conditions: Financial conditions (bank loans or cash), House inspection, House insurance.

After receiving the inspection report, the buyer, if not satisfied, may not buy and get a deposit back. Or, the buyer may ask the seller to repair the defect items outlined in the inspection report. Depending on the negotiation, the seller will fix all, partially repair. These requests must be made prior to the due date and the deposit will be refunded without penalty. After this day, the buyer will lose the deposit.

  • Realtors usually use Deposit agreement forms.
  1. Home inspection & insurance:

Inspection: The house inspection is not required, if the buyers can self-assess the house they are buying, this step is not required. However, since most houses in PEI are quite old, be advised to rent them to inspect the houses.

Contact the house inspection company, inspection fee of about 600 CAD (including HST) paid by the buyer, set 1 day for inspectors to inspect the house and they will report the result after 1 -2 days. Based on the report of the house quality inspection results, if necessary, negotiate the price, or not buy. This step is important because the Inspectors have the technical expertise to detect house faults, make recommendations on those faults …

Other attentions:

  • Check the foundation (basement) has a crack, or a water leak?
  • Roof
  • Structure

Insurance: Contact the insurance company for a quote on insurance, PEI usually uses PEI Mutual in PEI.

Contact the Realtor to indicate whether or not to buy.

  1. Legal and payment

Agreements

  • The purchase and sale of houses must be through a lawyer, both parties have its lawyer, Realtor can introduce a lawyer and buyers can also find their own lawyer through their friends.
  • The lawyer will contact the Realtor and prepare agreements.
  • Lawyer fees range from 900 ~ 1500 CAD, depending on the purchase prices.

Payment:

  •  Buy a certified check (bank draft) at the bank and give it to the buy-lawyer and get the key of the house on the closing date. Note: buyers are required to be present in Canada to sign on file at the lawyer’s office in Canada. There is a lot of trouble signing documents from abroad.
  1. Taxes and other fees
  • Property transfer tax: 1% of the house’s value, buyers are exempt if buying the first house in Canada.
  • Annual land tax: Because the City Council where the house is located determines the tax rate based on the value of the property, new or built houses will have different tax rates. Be average about 1% a year.
  • There are also a number of other fees and steps such as changing the name of own electricity, water, oil … simple to implement.

The above information is basic for reference purposes only, buyers should hire licensed personnels to get the most accurate results.

Author: Colin Tran.

photo by Bao Le

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