1. What is the MLS system?
Answer:
MLS stands for "Multiple Listing Service", it is only used by Canada's real estate boards of which the PEI Real Estate
Association is a valued member. The trademark is owned by the Canadian Real Estate Association. When a PEI property is listed on the MLS system, any member agent of the PEI Real Estate Association can help sell the property. It is a team approach to selling a property. The Vendor pays no more commission if more than one PEI Real Estate company is involved in the sale of a PEI property, the Vendor's commisssion is simply divided equally to both the listing agent and the selling agent. It's a win-win situation for the Vendor. All properties on the MLS system are listed on the following websites: http://www.mls.ca and http://www.realtor.ca, any perspective investor in the entire world can see properties listed in these sites. These buyers can then contact the listing agent and get more information about the property. In fact, app. 80 % of all properties sold in PEI are sold using the MLS system.
2. Can anybody buy PEI Real Estate?
Answer:
Yes, any investor in the world can buy a PEI Real Estate property. In certain circumstances, when a non-
resident of PEI is acquiring large acreage on PEI, the I.R.A.C. (Island Regulatory and Appeals Committee) may
have to approve the purchase; however, in the vast majority of cases, approval is granted to the buyer. Every
non-resident buying in PEI can purchase 5 acres and 165 feet on any waterfront property, and legally NOT have to go
through the I.R.A.C. process. Two people can buy 10 acres and 330 feet waterfrontage, etc.
3. Do I need a lawyer to buy a property in PEI?
Answer:
Yes, you need a PEI lawyer to search out a property for you to make sure there are no liens or mortgages
outstanding.
4. What is the procedure to buy a property in PEI?
Answer:
The Purchaser (with the help of a PEI Real Estate agent) fills out 3 forms:
1.An Agreement of Purchase & Sale
2. An Agency Disclosure form
3. A Schedule"A" form. These forms are submitted to the Vendor of the property for his or her acceptance. The Vendor can accept the offer or give a Counteroffer back to the Purchaser. Eventually an agreement is reached and when the offer conditions are met, the offer goes to the closing date and the Purchaser takes title to the property.
5. What is a Perk Test?
Answer:
Before any citizen of Prince Edward Island can get a Buiilding Permit, there must be a successful
Perk Test completed. This Perk Test is solely concerned with the type of soil a PEI property has in
regards to a Septic System. A good Perk Test measures the ability of the soil to absorb liquid.
Unfortunately, not all soils can absorb wastewater or purify it. Sewage disposal systems that are installed
in unsuitable soils usually malfunction by leaking raw, untreated sewage to the soil surface or a roadside
ditch, or by contaminating the groundwater.
To do a Perk Test, a hole of about 4 feet is dug by a backhoe in the area of the property where the septic tank
and septic field will be located. Then a Prince Edward Island government official will get into the hole and analyse
the profile of the soil at different depths in the profile. The PEI government official knows by training what a good soil profile should look like. He or she then will make a decision as to whether the Perk Test is Category 1 soil (The best soil test), Category 2 soil, or Category 3 soil, etc. Most properties in Prince Edward Island will be either Category 1 or Category 2 soil.
In conclusion, it is mandatory that a Perk Test be done in Prince Edward Island before a Building Permit will be
issued by the PEI government. When buying Raw Land on PEI, it is imperative that a Perk Test be done on it by
the Vendor or Purchaser before the closing date of the offer agreement to protect the Purchaser. In very rare cases, it may be that the Purchaser bought land that he or she cannot build on.
6. Do I need a Home Inspection done when I buy a PEI Home?
Answer:
It is advisable to have some kind of house inspection done. It is the choice of the Purchaser as to whether
it is a Commercial Home Inspector, or a friend, etc. who is knowledgable in assessing a home property.
7. What taxes do I pay when purchasing a PEI property?
Answer:
1. There may be a 5% GST (Goods & Services Tax) on the selling price of some PEI properties.
2. Provincial Real Property Transfer tax of 1% may be applicable.
3. NOTE: Yearly property taxes are higher for non-residents than for PEI residents.
8. What is a closing inspection?
Answer:
It is a final inspection done by the purchaser and his PEI Real Estate Agent on the closing date of the Offer agreement. This is to insure that the house is in the same shape and condition as it was when the purchaser had his or her first showing on the home, and house inspection. The Vendor is completely responsible for the home until the Purchaser takes title to it at the closing date.The Closing Inspecton is done on the closing date just prior to the Purchaser going to his lawyer's office to take title to the property. If their is a problem during the Closing Inspection, both sides will have to negotiate to work it out.
9. If I buy raw land on PEI, do I have to build on it right away?
Answer:
No, YOU build on a PEI property when YOU want to do so.
10. How can I find out background information on PEI before acquiring a PEI Real
Estate property?
Answer:
There are many good websites on the Internet to find out about Prince Edward Island. One excellent site, with an
abundance of information on PEI, is the PEI government website: http://www.gov.pe.ca. It has
phone numbers and email addresses of government officials who can answer your questions concerning government rules and regulations on PEI residential properties, commercial properties, subdivisions, taxes, loans, etc.
11. Who is responsible to do the Water Test on a property before the closing date?
Answer:
On a regular PEI Real Estate property, the Vendor is responsible for the Water Test by using a 3rd party to do the
procedure. If a property is "AS IS WHERE IS", then it will be the responsibility of the Purchaser to do the Water
Test. The Water Test will include a Bacteria Test and a Chemical Test. For more information about a PEI Water Test: http://www.gov.pe.ca/envengfor/index.php3?number=1006555&lang=E
12. What is the difference between "Tenants in Common" and "Joint Tenants"?
Answer:
Tenants in common is an arrangement whereby two or more people
co-own a real estate property with no "right of survivorship". Each owner in this agreement can choose who will inherit his or her
ownership interest at death.
Joint tenancy is different from the above in that each
co-owner's part of the property passes to the other co-owners
at death.
13. Is there a law in Prince Edward Island that governs the conduct of a PEI Real Estate
agent?
Answer:
Yes, all PEI Real Estate agents are licensed and governed by the "Real Estate Trading Act". This act can be
found at the Government of PEI's website: http://www.gov.pe.ca
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