Sellers Guide

Role of the real estate broker and brokerage representatives

Buying real estate requires extensive technical knowledge. This is why we recommend that you use the services of a real estate brokerage professional in order to make sure that all the steps involved in buying and selling real estate are completed according to good trade practices.

The main function of the real estate brokerage representative is to act as intermediary in the purchase, sale or rental of real estate. Thus they play a prospecting role by finding real estate for the buyer and a client for the seller; they play a negotiating role by facilitating communications between the parties involved and, mainly, they play an advisory role and helps the parties define their needs and complete their real estate transaction in a satisfactory manner.


Distinction between real estate broker and salesperson

The differences between a real estate Broker, Associate Broker and salesperson have to do with their respective levels of responsibility.

A real estate Broker licence may be issued to a person, not a company, and allows the holder to employ or authorize to act on their behalf, a person who holds a real estate brokerage representative licence. They are only authorized to act on behalf of a Broker. Under the law, the Broker bears full responsibility for the professional actions of the brokerage representative representing the brokerage.


Compulsory licencing

All real estate brokerage representatives in Nova Scotia must hold a licence issued by the Nova Scotia Real Estate Commission. The consumer who carries out a real estate transaction through a non-licensed person is not protected under the Real Estate Trading Act, since the protection mechanisms only apply when the consumer deals with a professional, recognized under the law. (Before you do anything, check with the Commission to make sure your brokerage representative is the holder of a licence issued by the Commission.)


Duties and obligations of real estate brokers and salespeople

Real estate brokerage is a profession which is regulated and controlled in order to protect the public in real estate transactions. The Real Estate Trading Act, the By-Law of the Commission and the Policies and Procedures of the Commission define how the profession should be practiced, so that consumers may be served fairly and competently.

Loyalty to the customer
Real estate brokerage representatives are bound by a strict obligation of loyalty to their clients, whose rights they are bound to promote and protect. They must act equitably toward each party to a real estate transaction.

Obligation to disclose
If your real estate brokerage representative has a personal relationship with the other party or if they are acting on their own behalf, they must inform you prior to the signing of the Agreement of Purchase and Sale.

Similarly, if your real estate brokerage representative is to receive compensation from a financial institution or a professional recommended by them, they must also inform you.

Advising and informing objectively and accurately
The real estate brokerage representative must advise and inform the parties to a transaction objectively and must provide them with all the explanations they need to fully understand and appreciate the services they are providing. They must also inform the parties of any factor which could negatively impact the transaction.

The real estate brokerage representative must also be able to demonstrate the accuracy of the information they provide using relevant documentation. This information verification principle must be upheld throughout the sales process, as the brokerage representative is responsible for the information he is disseminating.


Consumer protection mechanisms

Professional development

The issuance of a licence by the Commission is conditional on the successful completion of the Salesperson Licensing Course. This compulsory training is a prerequisite to take the profession's entrance examination.


Entrance examination
The profession's entrance examination is a mechanism that ensures that a real estate brokerage representative has the knowledge and competence required to provide adequate service.

Brokerage audit
The role of the Registrar is to ensure that the work methods of real estate brokerage representatives are in accordance with the rules of the profession. To verify this, the Commission's Compliance Officer carries out inspections of brokerages and makes recommendations as necessary.

The Registrar is the senior staff person at the Nova Scotia Real Estate Commission and is responsible for the administration of the Real Estate Trading Act and the Commission By-Law and policies.

The Registrar investigates when there is reason to believe that a brokerage representative has violated the rules that govern the profession. The Registrar has the authority to lay charges with the Commission's Discipline Committee if necessary.


Discipline Committee
The Discipline Committee has the authority to impose fines, require additional education, and, to suspend or cancel a violator's right to practice if they do not conform with current regulations. It cannot, however, compensate or indemnify victims.


Professional Liability Insurance
Real estate brokerage representatives are required to take out errors and omissions insurance.


Recovery Fund
The Recovery Fund has the authority to compensate consumers in case of fraud or breach of trust where an industry member has caused a customer or client a financial loss.


Brokerage representatives may or may not have an agency relationship with you. If you are a client then, there will be an agency relationship, if you are a customer then there is not an agency relationship. As a client, the brokerage representative and brokerage have a much higher level of responsibility to you than if you are a customer. The following sections give an explanation of agency and the obligations agents have to both clients and customers.

Sellers or Buyers Agency - with you as a client
Most sellers and buyers have agency relationship with the brokerage representative they are using. When you are in an agency relationship with a brokerage, the brokerage representative has the authority to represent you in dealings with others. Brokerages and their representatives are legally obligated to protect and promote the interests of their principals (clients). Specifically, the brokerage representative has the following duties:

  1. Undivided loyalty. The brokerage representative must protect the principal's negotiating position at all times, and disclose all known facts which may affect or influence the principal's decision.
  2. To obey all lawful instructions of the principal.
  3. An obligation to keep the confidences of the principal.
  4. The exercise of reasonable care and skill in performing all assigned duties.
  5. The duty to account for all money and property placed in a brokerage representative's hands while acting for the principal.

You can expect competent service from your brokerage representative, knowing that the brokerage is bound by ethics and the law to be honest and thorough in representing a buyer or representing a property listed for sale. Both the buyer and seller can be represented by their own brokerage representative in a single transaction.

Transaction Brokerage - with both the buyer and seller as a client
Transaction brokerage occurs when a brokerage representative or one brokerage is representing both the buyer and seller in the same transaction. Since the brokerage representative has promised a duty of confidentiality, loyalty and full disclosure to both parties simultaneously, it is necessary to limit these duties in this situation, if both parties consent.

If you find yourself involved in a transaction brokerage relationship, before making or receiving an offer, both you and the other party will be asked to consent in writing to this new limited agency relationship.

This relationship involves the following limitations:

  1. The brokerage representative will deal with the Seller and the Buyer impartially;
  2. The brokerage representative will have a duty of disclosure to both the Seller and the Buyer except that,
    • the brokerage representative will not disclose that the Buyer is willing to pay a price or agree to terms other than those contained in the Offer, or that the Seller is willing to accept a price or terms other than those contained in the Listing;
    • the brokerage representative will not disclose the motivation of the Buyer to buy or the Seller to sell unless authorized by the Buyer or Seller;
    • the brokerage representative will not disclose personal information about either the Buyer or the Seller unless authorized in writing;
  3. The brokerage representative will disclose to the buyer defects about the physical condition of the property known to the brokerage representative;
  4. The brokerage representative may disclose all comparable property information to the Buyer and the Seller at any time;
  5. the brokerage representative will not be required to disclose to the Buyer or the Seller confidential information obtained through any other existing or former agency relationship.

No Agency- with you as a customer
You may also choose to use the services of a brokerage representative without having any kind of agency relationship. This might occur, for example, when you are being shown a property by the Seller's brokerage representative.

The brokerage representative you choose to work with in this manner has a legal and ethical duty to provide you with accurate, honest answers to your questions and can provide all these services:

  • Explain real estate terms and practices
  • Provide and explain forms used
  • Assist you in screening and viewing properties
  • Inform you of lenders and their policies
  • Identify and estimate costs involved in a transaction
  • Assist you in establishing your range of affordability
  • Prepare offers or counter offers at your direction
  • Present all offers promptly

A brokerage representative who is not your agent cannot:

  • Recommend or suggest a price
  • Negotiate on your behalf
  • Inform you of their principal's top/bottom line
  • Disclose any confidential information about their principal unless otherwise authorized

You should not provide a brokerage representative who is not your agent with any information that you would not provide directly to their principal.

All Buyers and Sellers, whether in an agency relationship with a brokerage representative or not, will be given an agency brochure and asked to sign an acknowledgement that they have been provided this agency information and had an opportunity to review it.


How much can I afford to invest in a home?

Analyzing your financial capacity
Before you even start looking for a new home, you must conduct an analysis of your needs and an accurate evaluation of your financial capacity. You must establish a realistic budget taking into account your lifestyle and your goals. The role of this exercise is to set a reasonable purchase price. This way, you can narrow down your search and avoid being tempted by real estate that is above your means.

The key element in this exercise is accuracy. Remember that a budget is only useful if it takes into account your overall needs and personal or family situation.


Estimating your maximum mortgage loan
A simple way to estimate the maximum mortgage loan you can get is to multiply your gross annual salary by 2 (see Table 1). It should be noted that most mortgage lenders calculate this by multiplying the gross annual income by 2.5. However, we believe it is more reasonable to multiply it by 2 to avoid overextending yourself on your monthly payments. You should consult your banker or financial planner to get more accurate information as to what you can afford. This process is called getting pre-approval.

Table 1
Estimating your maximum mortgage loan based on your gross income*
Gross annual income X 2 = Maximum mortgage loan
$40,000 X 2 = $80,000
$60,000 X 2 = $120,000
$80,000 X 2 = $160,000
$100,000 X 2 = $200,000
*This method is approximate. We recommend that you prepare a detailed budget in order to evaluate a more realistic maximum mortgage.


Calculating your monthly housing budget
Your monthly housing budget is the amount you have to live in, finance and heat your future home, once you have fulfilled all your other normal obligations. To do this, you can use current data which will not change when you are a new homeowner; your net household income, your debts (student loan, car loan, etc.) and your current living expenses (food, clothing, insurance, miscellaneous expenses, etc.). (See Table 2)

The difference between your net household income and your total monthly expenses is your monthly housing budget. This amount must cover your mortgage payment (principal plus interest), taxes, heating costs and condominium fees, if applicable.

Remember that a budget is only useful if it reflects reality. Your budget, more than the methods used to calculate your monthly payments, will help you determine your maximum mortgage loan.

Table 2
Calculating your monthly housing budget
Groceries, lunches and outside meals (including beer and wine): $__________
Clothing and personal expenses: $__________
Public transit: $__________
Car loan: $__________
Car expenses: $__________
   - gas,oil: $__________
   - maintenance and repairs: $__________
   - insurance and licenses: $__________
Electricity: $__________
Water: $__________
Maintenance and repairs: $__________
Telephone: $__________
Cable, video rental: $__________
Leisure (outings, movies, theatre, sports, etc.): $__________
Personal restaurant meals: $__________
Books, newspapers and magazines: $__________
Cassettes and CDs: $__________
Furniture and other consumer goods: $__________
Savings (RRSP, etc.): $__________
Credit card charges: $__________
Home insurance: $__________
Life insurance: $__________
Other: $__________
Total monthly household expenses: $__________
Net household income: $__________
Monthly household expenses (above): $__________
Monthly housing budget*: $__________

* Most Canadian financial institutions use the  Gross Debt Service (GDS) ratio  to calculate their clients' maximum monthly payment. This method has the advantage of being easy to calculate, but the result is approximate. This is why we recommend that you take the time to prepare a detailed budget (see Table 2 above).

If you still wish to use the  Gross Debt Service (GDS) ration , calculate your gross monthly household income (family's total salaries before tax) and multiply by 0.32. The result will give you your maximum monthly housing allowance.


How much financing do I need?

One of the main concerns of real estate buyers is mortgage financing. To determine the amount you will need to borrow, you have to know the purchase price of the real estate and the total expenses you will need to pay cash. The summary of these calculations will enable you to determine the amount of financing you will need to purchase your home (see Table 4).


Cash Expenses
You have to plan on several cash expenses when buying a home. These costs must be estimated to determine the amount you will need to borrow to finance the purchase of your new home.

When presenting an offer to purchase you will probably make a deposit on the price of the house you are considering in order to prove you legitimacy as a buyer. For that, you have to plan on a cash outlay.

The downpayment is without a doubt your main expense when buying a home. A higher downpayment means lower monthly mortgage payments. If your downpayment is less than 25% of the purchase price, your mortgage loan will have to be insured by high ratio mortgage insurance such as that provided by CMHC. There are administration fees involved for the application. You also have to plan on legal fees and an insurance premium which is a percentage of the loan amount.

Related expenses
Several related expenses must be taken into consideration when buying a home, i.e. building inspection, property appraisal, loan application, legal fees and disbursements, property taxes, deed transfer tax, fuel adjustment, insurance, etc. (see Table 3).


Table 3
Calculating Related Expenses
Building inspection: $__________
Appraisal: $__________
Legal fees and disbursements: $__________
GST (new construction): $__________
Deed transfer tax: $__________
Adjustments and tax distribution: $__________
    - mortgage interest: $__________
    - property taxes: $__________
    - utilities (oil or propane): $__________
Condominium fees (if applicable): $__________
Water quality and quantity certificate (well): $__________
Mortgage brokerage fees: $__________
Mortgage loan insurance fees: $__________
Mortgage loan insurance premium: $__________
Moving expenses: $__________
Renovations and repairs: $__________
Furniture, appliances, window coverings, carpets, paint, etc.: $__________
Utility hookup: $__________
Home insurance: $__________
Other: $__________
Total: $__________


Summary of Calculations
Now that you have an overview of the expenses involved in buying a home, you need to make your final calculations (see Table 4). First indicate the purchase price of the real estate. Add the total amount of related expenses that you calculated in Table 3. You will get the acquisition cost of your new home.

From this amount subtract the deposit, downpayment and the proceeds from the sale of your current home if you already own one (use an approximate amount if the house has not yet been sold). The total will determine the amout of financing you will need to acquire your new home.

You are now in a position to verify if the loan you need to purchase your home fits your budget. Do not hesitate to make any necessary adjustments and to redefine your goals if necessary.


Table 4
Calculating the Amount of Financing Required
  Purchase price of the real estate: $__________
+ Related expenses: $__________
= Acquisition costs: $__________
- Deposit: $__________
- Downpayment: $__________
- Other funds
(net value of previous property):
= Financing required: $__________


Home Buyers' Plan

The Home Buyers' Plan (HBP) may offer an interesting avenue when you want to use the funds contained in your Registered Retirement Savings Plan (RRSP) to purchase a home. Each buyer may withdraw up to $20,000 from his RRSP without having to pay taxes at the time of withdrawal. The funds must be in the RRSP for at least 90 days prior to the withdrawal.

The Amount withdrawn must be paid back into the RRSP over a period of fifteen years at a rate of 1/15 of the amount per year. As an example, if you use $15,000 from your RRSP to purchase a home, you must pay $1,000 back into the RRSP each year (or one fifteenth of $15,000) for 15 consecutive years. Should the program user be unable to pay the money back, the non-reimbursed amount would be added to the user's gross annual income.

Note: This program is available to first-time home buyers only. The buyer cannot have owned a principal residence in the last five years. For more information, contact your real estate representative.


Table 5
Monthly Payment Per $1000 Borrowed*
Rate Cost/$1000 Rate Cost/$1000 Rate Cost/$1000
6.0% $6.40 8.5% $7.95 11.0% $9.63
6.5% $6.70 9.0% $8.28 11.5% $9.98
7.0% $7.01 9.5% $8.62 12.0% $10.32
7.5% $7.32 10.0% $8.95 12.5% $10.68
8.0% $7.64 10.5% $9.29 13.0% $11.03

* Based on a 25-year amortization period and a 10% downpayment

To use the above table, you must multiply the number of thousand dollar blocks in your mortgage loan by the cost per $1,000 borrowed. The result should not exceed the amount of your housing budget (see Table 2).

For instance, if your interest rate is 6.5% and the amount of your mortgage loan is $100,000, it would cost you $670 each month to pay back your mortgage (100 blocks of $1,000 borrowed, multiplied by 6.7 equals $670).

The shorter the amortization period, the lower the total interest payable (supposing the interest rate remains constant throughout the amortization period). It is a good idea, therefore, to go for the shortest amortization period possible.

Increasing payment frequency will help lower the interest significantly and will reduce the number of years required to pay back your mortgage completely. For example, a $100,000 loan at a rate of 10% with a 25-year amortization period would be paid back in a little less an 19 years (instead of 25) with bi-weekly instead of monthly payments. This payment method would save you approximately $50,000, or 30% of the interest.


Choosing your home

Defining your Needs
Once you have an accurate picture of your financial capacity and have established your budget, the next step is to define your needs. This exercise will allow you to reflect on your priorities, which will help you in your search and will guide your real estate brokerage representative. Following are the main elements to consider when defining your expectations.

Type of property
Are you looking for a single-family dwelling, a semi-detached or a townhouse? Do you prefer a new or older house? Do you want to own the house and the land or would you prefer a condominium in which only one unit is yours?

Are you looking for a home downtown, in the suburbs, or in a rural area? Do you prefer a new area? What is your tolerance to noise and pollution? Are you looking to avoid high-traffic areas? Is the state of development of the area where you will be living important to you? Do zoning regulations allow room for change?

Proximity of services
What are your needs in terms of public transit and public or commercial services? Is being close to work or to schools, etc. important to you? Will you feel safer living close to a hospital or a police or fire station?

Indoor considerations
What are you needs in terms of space? How many bedrooms and bathrooms are necessary? What type of heating do you prefer? How much storage room do you need? Do you need a laundry room and a workshop?

Outdoor considerations
What are you needs in terms of parking? Do you like gardening? If so, is the exposure of the house favourable? Do you want a patio, a balcony, a pool…?

Need for renovations
Are you looking for a house that needs no improvements? If you are thinking of doing the work yourself, do you have the necessary skills? If not, have you evaluated the cost of the repairs?


Organizing the Search
Organizing the search for your home is not the simplest step, but it is the most important and often the longest. It is recommended to take all the time you need before buying a home.

The key to choosing the right home is to really know your needs. Talk to your brokerage representative about your priorities and try to identify the features you are looking for but that could be subject to compromises. This way, you will avoid wasting time viewing houses that are too expensive, too big or that are simply not what you are looking for.

Choosing the area
Visit the areas that seem to fit your needs. Your real estate broker or brokerage representative can help you make a list of houses that meet your expectations. They have access to detailed information on the properties being offered for sale in the areas that are attractive to you, and can save you valuable time.


Choosing Well
When you have found the home you are looking for, make sure you see it at least twice, once during the day and once at night both during the week and on the weekend. This way, you can see for yourself the activity level in the neighbourhood at those hours when you will likely be at home. You can also appreciate the amount of traffic, ambient noise, street lighting, etc. Check everything: carpets, drapes, light fixtures, etc.

Below you will find a sample Facts Sheet that you can use to take notes. Please note that the Description Sheet provided by the seller's broker can also help you evaluate a property in which you are interested. This document contains a detailed description of the property in its current state and allows you to learn all the details which can help you form an enlightened opinion before you make a decision.

Review your list of priorities and take time to think without rushing. Losing a house to a quicker buyer carries much less consequences than buying a house that is not suited to your needs or which has a major flaw.


Facts Sheets
If you are looking for a home, you may be viewing several properties the same day. When taking stock of your viewings, you will usually need to compare features of various prospective homes that caught your attention. Then you start wondering if the first house had the proper exposure, if the second was the one with the fireplace, if the one with the dormer windows had air conditioning or if the small white one had a heat pump…

The Facts sheet was designed to allow you to note the features of a property or any other comment. It can be used as a reminder as well as a useful comparison tool when hesitating between two properties, for instance (see Table 6).

Elements to verify

Check the general state of the house: roof, gutters, siding, paint, etc.

Is the house energy-efficient? Is it well insulated? Are heating costs high?

How is the air quality and circulation?

Is the house damp? Are there traces of mildew? If so, check for cracks or water infiltration.

Do you have any reason to believe there are structural problems? Stuck windows or uneven floors point to this sort of problem.

Flush the toilets and check the faucets to make sure there is sufficient pressure.

Be sure to ask for a home inspection by a qualified home inspector when you make an offer.

Facts sheet
Real Estate brokerage:
  - salesperson's name:
  - tel:

Asking price:
Occupancy date:
Construction type:

  - total number of rooms:
  - number of bedooms:
  - number of bathrooms:
  - number of entrances:
Surface area
  - lot:
  - house:
  - lot:
  - house:
  - siding:
  - roof:
  - windows:
  - doors:
  - garage:
  - parking
Annual fees
  - property taxes:
  - school taxes:
  - garbage collection:
  - heating:
  - electrical system:
  - plumbing:
  - air exchanger:
Included items
  - floor-covering:
  - drapes:
  - electrical appliances:
  - shed:
  - central vacuum system:
  - alarm system:
  - other:
Outside arrangement
  - landscaping:
  - fence:
  - patio and balcony:
  - pool:
  - fence:

  - walls:
  - floors:
  - lights:
  - windows:
  - cupboards:
  - baths:
  - showers:
  - storage space:
  - noise:
  - safety:
  - air and water quality:
  - traffic:
  - industries:
  - commercial activities:
  - railroads:
  - flooding risks:
Inside arrangement
  - entrance:
  - kitchen:
  - living room:
  - family room:
  - bedrooms
  - bathrooms
  - basement:
  - work:
  - commercial services:
  - schools:
  - police station:
  - hospital:
  - medical clinic:
  - dentist:
  - public transit:
  - parking:
  - storage space:
  - recreational areas

Researching the fair market value of a property
If you are interested in a property, it is important to get an idea of its actual value on the market. With the help of your broker or brokerage representative, compare the house you like to other properties in the neighbourhood and try to identify the elements which could have a positive or a negative impact on the asking price: location, size, year of construction and state of preservation of the property, number and layout of rooms, materials used, landscaping, features specific to the area, etc. This information will help you determine the price you will offer the seller.


The Agreement of Purchase and Sale
The Agreement of Purchase and Sale is a contract through which a person undertakes to purchase real estate. In return, the document also indicates that the seller undertakes to sell the real estate once the offer has been accepted.

It should be noted that the use of the Commission approved Agreement of Purchase and Sale form is a compulsory form for residential real estate when a brokerage representative is providing the documentation.


Content of the offer to purchase
The Agreement of Purchase and Sale content is designed to protect both buyers and sellers. It is important to make sure that the information contained therein is in accordance with that of the listing contract.

Identification of the parties
The Agreement of Purchase and Sale must identify the parties bound by contract, i.e. the buyer and the seller. It should also indicate the names and addresses of the buyer and seller.

Object and term of the contract
As its name indicates, the object of the Agreement of Purchase and Sale is the purchase of real estate. The term sets a deadline after which the offer to purchase becomes null and void.

Description of real estate
The Agreement of Purchase and Sale should contain a detailed description of the real estate, including street address and items to be included as well as conditions to be met.

If the real estate is a condominium, the contract must specify the number of parking and storage spaces and their identification numbers.

Price and deposit
The Agreement of Purchase and Sale must indicate clearly the purchase price offered by the buyer. The price statement usually indicates that the payment will be made in full upon the closing.

When presenting an Agreement of Purchase and Sale, the buyer may give the listing broker a deposit on the purchase of the real estate. There is a section to this effect on the offer to purchase. The deposit must be placed in a brokerage trust account and will be deducted from the balance to be paid upon the closing. Normally the deposit cheque will be deposited into the brokerage's trust account once the offer or counter offer has been accepted.

Declarations and obligations of the buyer
The Agreement of Purchase and Sale contains a clause stipulating that the buyer has examined the real estate and declares that the buyer satisfied therewith. In the case of a condominium, the agreement specifies that the buyer will examine the declaration of the condominium, including the by-laws of the condominium and the reserve fund, and declares whether or not the buyer is satisfied therewith. It is, therefore, important to read this document.

Delivery of the real estate
The Agreement of Purchase and Sale contains a clause by which the seller promises to deliver the real estate in the condition in which it was when the buyer examined it.

Pre-closing viewing
The Agreement of Purchase and Sale contains a clause that allows the buyer to view the property to ensure it is in the same condition as it was when the offer was made.

Costs relating to repayment and cancellation
The costs relating to the repayment and cancellation of any debt secured by a mortgage and not assumed by the buyer must be borne by the seller.

Ownership documents
The Agreement of Purchase and Sale states the obligations of the seller regarding the titles of ownership. Thus, the seller must supply the buyer with a valid title of ownership, free of any debt, charge or other restriction of private or public law other than the usual easements. The seller must, therefore, supply authentic copies of his deed. These documents are provided to your lawyer.

Defect or irregularity
The Agreement of Purchase and Sale has a mechanism to protect the buyer who finds a defect or irregularity after signing the offer to purchase. This is called an inspection clause.

Addendums and Schedules
The Agreement of Purchase and Sale may contain a reference to addendums. The addendums are part of the Agreement of Purchase and Sale. The addendum usually contains clauses that are not part of the pre-printed Agreement of Purchase and Sale, such as water test clauses.

Conditions of acceptance
The conditions of acceptance of the Agreement of Purchase and Sale sets a deadline for two specific aspects of the Agreement of Purchase and Sale, i.e. acceptance and notification. The acceptance deadline of the offer sets a time and date that the offer is open for acceptance by the seller and by which the buyer must be notified that the offer has been accepted. These deadlines are important: if not adhered to, the offer is null and void.

The Agreement of Purchase and Sale must include the buyer's and seller's signatures as well as that of their respective spouses, if applicable. Each copy must bear the original signature of each of the parties. In addition, a witness's signature is recommended. Should there be any changes or additions to the wording of the agreement, they must be initialed by all parties.



Make sure all your conditions are included on the Agreement of Purchase and Sale: mortgage acceptance, home inspection, etc. If the house you are interested in is located in a rural area, have a water test (quality and quantity) done.

If your offer includes conditions, make sure to indicate an expiry date.

Items included in the Purchase
If you want items such as appliances, light fixtures, window coverings, tool shed, pool, woodstove, etc. to be included in the purchase, these must be listed individually on the offer, otherwise they cannot be claimed after signing unless the seller agrees. If there are valuable items, it is recommended to indicate the serial number if possible. See the definitions in the glossary for fixtures and chattels.

Checking the dates
Make sure you check the dates indicated for occupancy, adjustments and the closing. These dates are initially set by the seller, but can be modified on the Agreement of Purchase and Sale.

Deposit in trust
When presenting an offer, a deposit is recommended. This deposit will be applied to your downpayment or will normally be returned to you should, as a result of a clause in the agreement, the transaction not go through. In order for the broker to release the deposit the buyer must request its return in writing and the seller must agree to the release in writing. Once the offer is accepted, the broker will deposit the funds in a trust account. This way, your deposit will be protected by the Recovery Fund up to a maximum of $25,000 per transaction. Should a buyer choose not to complete a purchase for reasons other than a clause in the agreement, the deposit may be forfeited to the seller.

Location certificate
It is important that you have a new one done by a surveyor. Using a location certificate provided by the seller does not protect you as the buyer. You should consult your lawyer.


The counter-offer
The owner-seller of real estate may accept or refuse any offer presented to them. The seller may also make a counter-offer. The first purpose of the counter offer is to signify to the buyer that their offer has been rejected, but that the seller would be agreeable to the offer if specific changes or additions are made.

The counter-offer form may also be used to include or exclude certain items, to change the selling price or simply to further clarify the offer. The buyer in turn may not accept the counter-offer and wish to make a new offer.

Conditions of Acceptance
The conditions of acceptance of the counter offer set a deadline for its acceptance and notification. Therefore, the deadline for accepting the counter offer is a date and time by which the seller cannot withdraw their counter-offer, and by which the acceptance by the buyer is given to the seller in order to be valid.

Any counter offer should include a reasonable deadline (usually between 12 and 24 hours) by which the counter offer must be refused or accepted.

If the counter offer is accepted subject to the conditions stipulated in the agreement, the property will be considered sold, although the transaction will only become official on closing. However, the transaction cannot be completed as long as all of the conditions of the contract have not been fulfilled. Therefore, a maximum dealine must be set for the conditions to be carried out, in order that the closing can be finalized.


Using Specialized Services
By dealing with duly qualified people, whose services are covered by professional liability insurance, you will reduce the risk of unpleasant surprises.


Main services used when purchasing real estate

Home Inspector
Not many real estate transactions proceed today without there being a prior home inspection. The Nova Scotia Real Estate Commission strongly recommends that consumers have a thorough home inspection conducted before they make a purchase. It recommends, as well, that they specify, in the offer to purchase, that the sale of real estate is conditional on this inspection; a written report should be provided to the consumer by the inspector.

The Commission emphasizes the importance of consumers carefully selecting their home inspectors and verifying the inspector's reputation with a number of sources, if possible. It also advises a potential buyer to retain the services of an inspector from when they commence the process of purchasing real estate. The buyer should also ensure that this inspector has professional liability insurance against faults, errors and omissions.

A home inspection is an assessment of the condition of property. It is not an inspection to determine whether or not the property meets the current building code.

The real estate broker or brokerage representative may suggest several home inspectors to their client and, generally, this is what the client is expecting. If they do so, you, as the buyer, must decide which inspector you wish to use. Brokerage representative are not permitted to steer clients to a specific inspector.

Land surveyor
The land surveyor will carry out either a full survey or complete a location certificate. The surveyor will express, using a location certificate, an opinion on the location and condition of the real estate compared to the titles and the legal description as well as any easements, laws or regulations governing real estate. The alternative is to have a full survey done, which includes actually staking out the boundaries of the property. You should consult your lawyer to determine which is appropriate. Purchasing title insurance may be an alternative to having either type of survey completed.

Mortgage broker
A mortgage broker can help you identify the best loans available on the market, based on your needs and the type of loan you want.

The lawyer plays a pivotal role in the conclusion of a real estate transaction, including when it comes to title examination. One of the lawyer's main responsibilities is to complete a title search to confirm that the buyer gets clear title to the property. Your lawyer, of course, will give you advice on any legal aspect of your property purchase.


The Mortgage Loan
Most people need to take out a mortgage loan to finance the purchase of a home. A mortgage loan is a method of financing in which the real estate serves as collateral for the debt repayment. As indicated above, the amount to be borrowed will vary based on the amount of the deposit and the downpayment. The higher these amounts, the lower your mortgage loan will have to be. To evaluate your financing needs, see "How much financing do I need?".

The amount borrowed is referred to as the principal, from which the interest is calculated at interest rates in effect in the lending market. Interest rates are influenced by multiple economic factors, and their fluctuations are difficult to predict. This is why we recommend that you choose your loan based on recent variation in the rates available on the market.

Your monthly payment is based on a spread of the debt and the principal to be repaid over the duration (term) of the loan, usually set between six months and five years.

The number of years required to repay the loan is called amortization period, usually between 10 and 25 years. Some newer products go as long as 35 years.

The net value of the real estate is calculated by subtracting the unpaid portion of the loan from the purchase price.


Type of Loans
Different types of mortgage loans are available on the market. Some may or may not include prepayment privileges (open or closed term). In others, the interest rate is frozen for the term of the loan (fixed rate) or follows market variations (variable rate).

Certain types of mortgage loans may suit your needs better than others. This is why we recommend that you shop around in order to negotiate the best possible terms.


The Property Transfer
Once the offer to purchase or the counter offer has been accepted, the next step is to make the transaction official. The two main components at this stage are the title examination and the closing. The property transfer requires the services of a lawyer, but your real estate broker or brokerage representative continues to play a central role at this step of the real estate transaction. Among other things, they will make sure that all documents required are available and will bring assistance in case any problem arises.


Title Examination
The lawyer will do the necessary research in order to guarantee marketable title of ownership. The lawyer will verify that the seller is indeed the owner of the real estate, whether they have the right and the ability to sell, if a spouse or other person must consent to the sale, etc.

All property sales in Nova Scotia are now registered through the new Land Registration Act requirements and the government certifies title.

Should the buyer have any concerns regarding zoning, legal property usage, etc., they should consult a lawyer. It is recommended that the buyer, in conjunction with their lawyer, have a surveyor review the legal description of the property and provide either an up-to-date location certificate or a full survey to confirm the location, easements and other important information about the property.

Through the title examination, the lawyer will be able to detect the charges or real rights likely to affect, limit or devalue your right of ownership. The buyer may wish to purchase title insurance to protect against unexpected title encroachment issues, etc. The buyer should consult their lawyer regarding the need for title insurance.

The closing
The final step of the transaction is the closing which involves the completion of the necessary legal and mortgage documents. This is usually completed after the buyer has completed their pre-closing viewing.


Registration of rights of ownership
Once the closing is final, the lawyer will register the transaction with the Registry of Deeds. The lawyer may retain the funds until this step has been completed.


The Nova Scotia Real Estate Commission
Dealing with professionals to ensure first-rate service!
Created by the Real Estate Trading Act, the Nova Scotia Real Estate Commission (NSREC) has as its main mission, ensuring the protection of the public by overseeing the activities of all real estate brokerage professionals. Among other things, it ensures that brokerage representatives carry out their activities in accordance with the Act and regulations currently in effect.

Among the bodies contributing to the protection of the public in the field of real estate brokerage, the Registrar of the NSREC, whose role consists of overseeing the activities of the brokerage representatives, including auditing their records, accounts and actions. The Registrar may order an investigation and lay charges if a brokerage representatives refuses to follow the Act and Commission's By-Law.

The Commission's Compliance Officer investigates if there is reason to believe that a brokerage representative has acted improperly, and may recommend charges to the Registrar if necessary. Any brokerage representative who does not act in accordance with the Act and the regulations governing the profession could be charged and required to appear before the Discipline Committee, which has the authority to impose fines, suspend violators or even revoke their right to practice.

The Recovery Fund has the authority to compensate consumers in case of fraud or breach of trust by an industry member which results in financial loss to a buyer or seller.

Higher Standards
The Commission is continually monitoring and upgrading the education of brokerage representatives through continuing professional education


Do you have a problem?

Are you dealing with a real estate brokerage representative and are unhappy with the service you are getting?
The first thing to do is to discuss the problem with your brokerage representative. If you are not satisfied with the outcome of the discussion, contact the broker or manager of the brokerage where your brokerage representative is based. If this yields no results or if you feel you have received no information leading you to believe that everything is being handled properly, contact the Commission's Compliance Officer, who can get the information you need to clarify the situation and find out about your rights.

Nova Scotia Real Estate Commission
7 Scarfe Court
Dartmouth, Nova Scotia B3B 1W4
Phone: (902) 468-3511 or 1 (800) 390-1015
Fax: (902) 468-2533 or 1 (800) 390-1016




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