Buying

Buying Real Estate As a Foreign Investor

 

Buying real estate in Canada is a fairly straight forward process, but as a foreign buyer there is some additional information you will require.

If you are a foreign buyer and you stay in Canada for less than 6 months a year, then the Canadian Government will classify you as a non-resident. As a non-resident you can still open a bank account and purchase property, but if you stay in Canada over that six month period you will have to apply to become a Canadian immigrant.

Most provinces in Canada do not have any sort of restrictions on foreign ownership of real estate here in Canada; However, there are some provinces that put limits on the amount of property that a on-resident can own. For example on Prince Edward Island, a non-resident who wishes to buy property must put in an application to the Island Regulatory and Appeals Commission for any amount of land over 5 acres, or land with a shore frontage more than 165 feet. Manitoba has restrictions on non-residents from owning farmland, unless they plan on moving there within two years. In Saskatchewan a non-resident cannot own a property that is over 10 acres. Albert restricts non-residents from owning more than 2 parcels of land, and the total amount for both parcels cannot go over 20 acres. Here in British Columbia there are no restrictions for non-residents. So if Penticton, or some other location in the Okanagan appeals to you just make an appointment with a local realtor in Penticton who will be able to help you out in your search for a piece of the Canadian dream. 

After you have found yourself a real estate agent, secured a mortgage, made an offer on the property you wish to purchase, and had that offer accepted you will have to make a deposit. Your offer has to be made in writing so that the entire transaction is perfectly clear. Your real estate agent will help you with this. Once you as the buyer has signed the offer it is a legally binding document. At this point should you decide you don’t want to go ahead with the deal you will lose your full deposit and also have legal action taken against you. 

Your realtor will make sure that every item that is included with the property will be written in on the offer as ‘chattels included’. It is recommended that your real estate agent places a couple of clauses that say that the offer is subject to a building inspection and that you must be able to meet the financial requirements. Once this offer is put together it is given to the seller of the property. At this point negotiations may start. This could be a change in price, the closing date, and chattles. The seller initials these changes and then the paper work is sent back to you for you to initial if you agree to the changes. Finally the end result will be an Agreement of Purchase and Sale. This will have your final purchase price and the amount of deposit you will have to make. This deposit is placed in a trust account to go towards the purchase of the property once the offer is finalized and accepted by both parties and the transaction is finished.

In Canada Realtors are self employed and receive payment by way of commission from the seller of the property. It doesn’t matter which realtor is listing the property as a purchaser can buy through the realtor of their choosing. Because there are usually two realtors involved in the sale of a property – The buyers agent and the sellers agent the two realtors would divide the commission. Note some agents can be dual agents, but they must declare this to both the seller and the buyer. 

For more information on mortgages and real estate in Penticton contact Scott Bowland:

Phone: 250-493-6040
Mobile: 250-462-2274
Fax: 1-866-534-9145

#101-301 Main Street, Penticton, British Columbia, V2A 5B7