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Do you really need a property inspection when purchasing a home in Edmonton?

A real estate property home inspection is an objective visual examination of the physical structure and systems of a house, from the roof to the foundation. It is for the sole benefit of the purchaser and is usually subcontracted to a certified licensed residential real estate inspector, paid for by the buyer and can take one to four hours depending on the size and condition of the property. At the end of your inspection, a standard home inspector’s report will be supplied covering the condition of the home.




A home inspection can identify the need for major repairs or builder oversights which can lead to unpleasant surprises and unexpected difficulties in the future. Buying a home can be the largest single investment you will make and spending a few hundred dollars for peace of mind is money well spent.


Home inspection components covered include:

  • heating system including furnace and hot water tank
  • the central air conditioning system
  • carbon monoxide and fire alarm detectors
  • interior plumbing using both visual and water residue tools
  • mould issues and water damage
  • electrical systems
  • the roof & attic
  • visible insulation of walls, ceilings, floors, windows and doors using a thermal ray tool
  • foundation & basement
  • other structural components which may need major repair or replacement.

Depending on your chosen property inspector, there may be some things that will not be inspected such as things which can not be seen visually and appliances. You may want to check that these chattels are in working order.


Foreclosures:

If a home inspection is not allowed on a bank foreclosure offer to purchase, it is still a good idea to have one done, prior to putting in an offer. 


New Homes:

In Alberta, builders must supply a new home warranty at closing, however, new homes should ALWAYS have a home inspection done. Building a house takes time and there are always things that get missed. It is easier to address these concerns before you remove your inspection condition.


What if the report reveals problems? No house is perfect. If the inspector identifies problems, it doesn’t mean you should or shouldn’t buy the house. Talk it over with your real estate agent. There are a few options to address any concerns you have.

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Home >  Real Estate Q and A > Title Insurance versus a Real Property Report

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 to 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 the 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.
  • The 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 a 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 in the current state. 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. /li>
  • 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.


For more information on real property reports and the effects on the resale of your residential dwellings and a free Edmonton Home Evaluation, contact one of Remax Elite Realtors.

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Home >  Real Estate Q and A > What is Closing Costs

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 expenses of the house are paid for by the seller, usually including real estate commissions, the buyers pay a variety of fees such as mortgage origination charges, appraisal fees, title insurance, lawyer, home insurance, homeowner association fees (HOA) and property tax adjustments. 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 utility hook-up costs. As a rule of thumb, one to two per cent 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 advice.

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Data is deemed reliable but is not guaranteed accurate by the REALTORS® Association of Edmonton.