The Real-Estate Quiz
Tests your knowledge on residential home sale and purchase.
An individual who moves more than 40 kilometres frorm his current residence for work can deduct from his income :
Answer: All of the above
The above are applicable to you if you must move more than 40 kilometres from your current residence because of a new job or a transfer. Taxation laws allow you to deduct moving costs and costs related to the sale of your house, including the agents commission, from your income.
Should a seller accept a conditional offer to purchase based on the sale of the buyers house?
Answer: No never
The seller has no advantage in accepting a conditional offer to purchase based on the sale of the buyers house. In so doing, he could loose several serious buyers who could buy without this major condition.
If there is a hidden defect, how much time does the buyer have to come back to the former owner?
Answer: There is no time limit
The buyer can come back to the former owner as soon as he is aware of a hidden defect. But it is incumbent on the buyer to prove that the defect was not visible or identifiable at the time of purchase. To do this, the buyer will require the services of an inspector. Once the defect is found, the buyer will have only a short time to tell the former owner. When buying a property, it is essential to call upon an expert for an inspection of the building. This being said, no one is exempt from a hidden defect. Even an expert can overlook a defect at the time of inspection.
What renovations add the most value to a property?
Answer: The look & the kitchen and bathrooms
A new roof, replacing windows and renovating the kitchen and bathrooms are what add the most value to a house. Obviously, the total cost of this work will not be recovered at 100%. But if the quality of the renovations is good, the house will sell at a better price and more quickly.
Is allowing the buyer to take over the mortgage a good decision on the sellers part?
This practice is really not recommended for the seller. In fact, should the buyer miss making his mortgage payments, the mortgage lender could try to recover the amounts owing from the seller and can do so even if the buyer refinances his mortgage after the term. So the first lender always remains indirectly responsible for this debt.
Is the agents commission the only cost incurred by the sale of your property?
In addition to the agents commission, the property owner must generally pay the fees to discharge the mortgage as well as a new localization certificate (500 $) if it is not up to date. The seller must also pay a penalty if his mortgage is paid up before the end of the term. Lastly, a pyrite test ($375 per sample taken) could be required if the property is situated in a risk zone.
Can sellers who receive a conditional offer to purchase based on the sale of another property continue offering their property to other buyers?
Answer: Yes: but the first offer to purchase has priority
If the sellers receive a new offer to purchase, they can accept it condtionnal to cancellation of the first offer. Thus, once a second buyer has fulfilled all the conditions in their offer to purchase, the seller can send a written notice (usually within 72 hours) to the first buyer. Within the deadline, first buyers could, if they wish, proceed to purchase the property even if their own is not yet sold, or render null and void their offer to purchase by advising the sellers that they are relinquishing their offer on the property.
Before proceeding with the purchase of a condo, buyers have the right to review the building's financial statements.
The financial statements help buyers verify certain financial aspects of the purchase of their new apartment. Among other things, they will know what amount is in the reserve fund and the expenses incurred over the last year.
When purchasing a condo, the declaration of co-ownership contains a serie of rules which will indicate to the new owner what should or should not be done, such as:
Answer: All of the above
Buyers can, within a period of usually 7 to 10 days, take note of all these rules governing an apartment held in co-ownership.
Should buyers go ahead with a backfill analysis before purchasing a property?
Answer: Only for a property located in a high-risk area
Never purchase a property without first having a backfill analysis done. It protects the buyers, who could retract their offer if the analysis shows a high IPPG indicator. It is also important to keep the original of the report in a safe place. It will be useful in the event that the building is sold.
How many days do buyers usually have to get approval for a mortgage that meets the conditions outlined in the offer to purchase?
Answer: Between 10 and 30 days
Buyers have a deadline of 10-30 days (regardless of the type of building being purchased) to obtain approval for a mortgage that meets the conditions outlined in the offer to purchase such as, the rate, term, capital and interest payments based on the term and amortization period.
If the building inspection shows a problem that could significantly affect the building, buyers can retract the offer to purchase.
If the inspection shows a problem that could affect the value of the building, buyers have the right to retract their offer to purchase by giving the seller a copy of the inspection report within 4 days following the expiration date for inspection indicated in the offer to purchase. Buyers can also negotiate with the seller for a reduced price equal to the cost of the building's repairs, or can demand that the seller carry out the repair work.
Which of the following conditions is found in the offer to purchase?
Answer: All of the above
The offer to purchase may also include many other conditions such as: analysis of leases and expenses (for an apartment building), declaration of co-ownership (for a condo), minutes of meetings (for a condo) and the sale of another property.
Does an offer to purchase legally bind the parties?
Answer: Yes: if all conditions in the offer to purchase are met
The offer to purchase then becomes irrevocable and binds the parties.
The building inspector is an expert capable of identifying all defects, visible or hidden, that a building may have.
A visible defect can be seen by the naked eye by an informed person such as a building inspector. It could be mould, cracks, an aging roof, etc. On the other hand, the hidden defect is not detectable by the naked eye, even by an expert. It could be a defective French drain, a water infiltration problem underneath the floors.