7 Tips To Help You Buy Real Estate On Pei

Is buying real estate on PEI all that different from buying land and property anywhere

else in Canada? With a few exceptions that are unique to our local market the answer would be no. The basic steps of negotiation, offer and closing remain the same however there are some special considerations. Tips 1 and 2 are unique to PEI, while tips 3 through 7 are common to all real estate deals.

1. PEI is home to the islander and while they are in general laid-back and given to helping their neighbour, the island is quite conservative and as such it is not a good idea to low-ball too drastically on the first offer. While vendors anywhere may be insulted by a particularly low-ball offer, it seems that islanders are more prone to simply walk away from such offers. This is further complicated for non-islanders making a purchase here by the fact that PEI real estate prices are so much lower than most of the places they may be familiar with that it is hard for them to remember that a small decrease in price is actually quite a high percentage of the total price. So be guided by a comparative market analysis that can be had from a local realtor.

2. Some people believe that they can not, as non-residents, buy property here. They have heard of IRAC, the Island Regulatory and Appeals Commission. IRAC does control how much land you can own but you only have to ask permission if you are buying a huge amount of land, want to develop it in some special way, are buying more than 65 ft of waterfrontage (double that amount as a married couple) , or you are a major shareholder in a corporation that owns considerable PEI lands. For most people IRAC approval, even if they need to apply, is not an onerous procedure. There is a $500 or 1% fee however that should be kept in mind.

In addition to these tips that are uniquely PEI in nature there are some general tips you should follow when purchasing real estate.

3. Have a pre-approved mortgage in place. This means going to the bank or other lender and getting a certificate of approval from them guaranteeing that they will, for the next 90 days or so, create a mortgage for you in a certain sum of funds. This way both you and vendor know you can finance the purchase and your offer will be taken more seriously

4. Have a reasonable sized deposit ready. The larger your deposit the more serious you look.

5. Be prepared to be flexible on closing dates as this might make an offer that is not as as high as others look more attractive to some vendors.

6. When making an offer set the reply time so as to give the vendor time to consider and reply without leaving the door open to other offers.

7. Keep subjects to a minimum however in PEI if you are a non-resident and IRAC approval is necessary, ensure that you add subject to IRAC approval.

Having a PEI real estate agent handle your offer to purchase will help to ensure a smooth process and qualified, knowledgeable help should there be bumps on the road.

by: R. Parker

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