Category Archives: Buying and Selling

How Do Canada’s New Marijuana Laws Impact Buying A House?

Canada’s decision to legalize recreational marijuana use has made a huge impact on the world stage. In fact we are only the second country to do so after Uruguay in 2013. While I don’t partake myself I am in favour of this legislation. Alcohol is actually a far more harmful drug despite being legal for decades. But what about marijuana and home ownership? How do Canada’s new marijuana laws impact buying a house?


Legal Marijuana Production For Personal Medical Or Recreational Use

I’m fairly certain that the new and existing medical marijuana laws already on our books will have zero impact on home ownership. The 4 plants per household limit for recreational users represents zero risk to the health and integrity of a home. But complex rules allow a medical user to grow more. However, the number of plants allowed is nowhere near enough to damage a property in any way.

Criminal Marijuana Production

Criminal marijuana cultivation is a whole other matter. If a home is being used for this purpose and the police get involved it can be almost impossible to get financing. If the property is declared a grow-op this dubious status is actually registered as an instrument on title. Typically an inspection by the state is mandatory and if necessary, remediation and rehabilitation.

But even if this work is completed and the instruments pertaining to the criminal activity are removed from title they still show up in a ‘deleted instruments’ search. This is usually the point where you are turned down for financing or insurance, especially if the grow-op was large or relatively recent. Read about this from a lawyer’s perspective.

In my opinion marijuana grow-ops are certainly something to stay clear of. But buyers willing to assume the risk can often get a former grow-op at a substantial discount. It’s not impossible to get financing, just difficult. Many alternative lending sources are willing to do so at higher rates. And the impact of prior criminal activity will lessen given enough time.

The Final Word

To summarize, it’s clear that Canada’s new marijuana laws won’t affect buying a house in any way whatsoever. And you shouldn’t be concerned if you see a few plants when shopping for a home. But criminal enterprises like grow-ops are something else entirely. My advice is to simply stay away from these properties. They aren’t worth the headache for the vast majority of buyers.

Plumbing In Your Home

Knowing about the plumbing in your home is a required skill when working as a Realtor. Being able to identify plumbing types is part of the job. Prior work experience in construction is definitely a big plus. Of course I learned about plumbing in Real Estate College too. But my biggest source of knowledge about plumbing when I first became a Realtor is the very old house I call home.

Having said all that I’m pretty quick to note what’s in a home, both the good and bad. So here’s a quick break down of the various types of plumbing in your home and your neighbours.

Plumbing Supply Types

On the supply side copper pipe is the most prevalent here in Ontario. I’d say it’s in 95% of the homes, with the balance being mostly PEX tubing. There are other types as well but they are way less common.

PlumbingCopper is an excellent material for water sources that are slightly alkaline in nature. A pH above 7 stops metal leaching and corrosion that occurs if a water source is acidic. This keeps your pipes intact and prevents lead from leaching out of the 50/50 lead/tin soldered joints common in older properties. Municipal water supplies are made intentionally alkaline for this exact reason. Alkalinity also protects against lead leaching in places where lead supply piping still exists such as the Beaches area of Toronto.

Plumbing

Pex Tubing Photo Claude Taylor

PEX tubing is the other popular choice for water supply. It’s easy to install and cheaper than copper which is why it’s found in so many modern homes. But there are several different manufacturers so it’s important to know which brand you are working with. Concerns about PEX center on chemicals leaching from the plastic over time. I think this is a valid worry due the relative newness of this material in supply piping.

Kitec is the other type of plastic supply piping. It’s bad stuff! You still find it from time to time unfortunately. This piping eventually ruptures if given enough time. It was used in Canada from 1995 to 2007. The manufacturer settled a class action lawsuit a number of years back. It’s big bucks to have it ripped out and you would be entitled to a hefty discount if you were buying a property with Kitec.Plumbing

The last type of supply piping you’ll find is galvanized steel. You can still get this stuff although it’s hardly ever used anymore. It rusts out over time both inside and out and can become clogged and even plugged up from internal corrosion. It can be hard to identify by sight alone. Using a magnet is a great way to find out.

Plumbing Drain Types

PlumbingIn Ontario the gold standard for single family residential waste plumbing is ABS plastic. It has been in use since the 1970s. It’s cheap, durable and really easy to work with. PVC is a great alternative too. It’s less common though and a bit more complicated to join together. The usage of one type or the other is dependent on your local building code.
Plumbing
You’ll often find other types of waste lines in older properties. Homes in the 1960s and early 70’s had sewer lines entirely of copper. This material can be a poor choice in many applications. Waste water is acidic and eventually corrodes copper from the inside out. Runs of line that hold standing water are especially problematic.

PlumbingIn many older homes cast iron was the material of choice. It’s durable due to its very thick walls but brittle and will rot out eventually due to corrosion. Cast iron was common in properties from early last century into the 1950’s. Large vertical sections of cast iron (called the stack) will often have galvanized steel or even copper coming in from sinks and bath tubs. Toilets are usually connected directly to the stack with bronze and lead.

I’ve come across many older homes with several types of waste plumbing from various repairs or renovations over the history of the property. Replacing the entirety of the waste system is an expensive and daunting proposition and it’s rarely done. So knowledge really helps. Get a good Realtor and an inspection too. And make sure you know what to look for when buying property.


Your Home Plumbing

Agreement of Purchase and Sale

The Agreement Of Purchase And Sale (AOPS) is the primary document used to purchase a property. It’s equally important to both buyer and seller. An AOPS is almost always drawn up by an agent for a buyer client. Thus it’s crucial that the listing agent carefully scrutinize a contract that they have had no part in writing.

I can’t stress enough how important the AOPS is. Once signed it’s a binding contract between buyer and seller. It’s one of the key documents your Real Estate Lawyer works with. The AOPS is also forwarded to your lender..

I can write an agreement of purchase and sale in a half hour or so. But it often takes me just as long to explain the details of the contract to my clients. There are no shortcuts to the process and I never pressure my clients to hurry through the AOPS. After all there are 28 separate clauses and Schedule A to contend with as well as data such as names and price.

In today’s post I’ve shared a YouTube video taking you through the AOPS from start to finish. Just a warning, it’s long! But 15 minutes would be almost unacceptably quick if I was actually reviewing the document with real clients.

I’ve also included the 7 pages I used to make the video which you can review while watching.


agreement of purchase and sale

agreement of purchase and sale

agreement of purchase and sale

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TREB, Zillow And Home Sales Data

Zillow’s partnership with Century 21 and the Toronto Real Estate Board’s recent loss to the Supreme Court clearly show which way the wind is blowing with regard to real estate home sales data.

The Toronto Real Estate Board (TREB) is being forced to share data on buyer agent commission rates, prior listings, previous sold prices and transactions that haven’t closed.

Zillow’s entry into the Canadian marketplace is sure to raise some eyebrows in Canadian real estate circles. The juggernaut has data on 110 million homes south of the border. Our market is a drop in the bucket by comparison.

But the news about Zillow and TREB won’t change what I do with the exception of providing data to the public at large.

I’m not afraid of greater transparency in my business, in fact I embrace it. I’ve been running a no sign-in-required listings feed since my first days and I publish local monthly housing statistics too. Data certainly helps me do my job but doesn’t play a huge role in getting me business. A consumer armed with the same data I have will hire me for reasons that have nothing at all to do with pricing.

I’m hired for my skill in

  • Marketing
  • Negotiating
  • Writing contracts
  • Communication
  • Collaboration

and knowledge of

  • The local real estate market
  • The listing process
  • The buying process
  • Housing of all types

and because I am

  • Responsive to my clients’ needs
  • Likeable
  • Trustworthy
  • Honest

This is truly the information age and it’s no surprise that greater transparency is coming. The Supreme Court has sided with the Competition Bureau against TREB. Zillow is here now. The public will absolutely benefit and I’m fine with that. Change? Bring it on….

How Do Real Estate Commissions Work?

How Real Estate Commissions Are Paid


On the surface a commission arrangement on a real estate transaction seems pretty simple. But each transaction is unique and like many things the devil is in the details.

So how do real estate commissions work and how do we get paid?

I’ll start with the easy stuff first.

Commission Agreements Between Agents, The Seller And Buyer

The seller pays a commission to the listing agent, who works for the listing brokerage, and to the buying agent and brokerage that buys the property for their client. This commission is determined prior to listing the property.

Because of this arrangement a home buyer typically pays no out of pocket expense for using an agent to buy properties.

Here in Kitchener-Waterloo a buying agent usually gets paid between 2 and 2 ½ percent of the sale price of the property + HST.

The listing agent gets paid anywhere from 1 to 3 percent of the sale price + HST.

An agent working with both buyer and seller is engaging in multiple representation, or double ending as it’s known in the industry. A double ending agent will usually offer a discount on commission in an attempt to make the buyer and seller happy.

Some agents and brokerages will list your property for as little as 1% + HST but these offers more often than not include caveats and exceptions that end up costing you more.

To each his own, but I’m a firm believer in the saying you get what you pay for…

Anyways, the total commission that’s ultimately agreed to is paid out to the listing brokerage upon closing by the seller’s lawyer. The listing brokerage then pays out the buying agent’s commission to the buyer brokerage.

Commission Agreements Between Agents and Their Brokerages

The commissions are further divided depending on the individual arrangements of each brokerage and the agents involved. This is known in the industry as the split…

This is also the complicated bit where the devil is in the details…

At many brokerages the split percentage changes at set intervals based on the volume of business the agent generates, and resets at the end of each year. Depending on where an agent is in the fiscal year they may pay as little as 5% to the brokerage or as much as 35% or more.

Some brokerages only ever take 5% from the agent but have sky high desk fees of over $1,000 a month that the agent pays instead. There are also brokerages with very low splits that have no brick and mortar offices and thus lower business expenses.

If an agent is on a team or got the sale from a referral the commission is divided up even further. The standard referral fee from another agent is 25%, and teams often charge the agent 50% or more.

As an example, a referral that was early in the year netted me only $3,900 on a sale price in the mid 500,000’s. But another more recent transaction at the same price brought me $9,200. And both properties paid my brokerage a 2% commission.

Anyway, that’s how it works. Simple eh?