Saturday, January 20, 2018

What is Title Insurance?

Today’s post is a guest blog from Corinna Stevens, attorney with the Byron and Company law firm[note]We also recommend Don Scott McMurray Law Office and Allenby Law[/note]here in Fort McMurray.

The Real Property Report, Title Insurance, and You

The standard Alberta Real Estate Association Residential Purchase Contract, used almost exclusively by all realtors in Fort McMurray, contains a term which requires the seller of a property to provide the buyer a Real Property Report, or RPR, with evidence of municipal compliance or non-conformance, as part of the Closing Documents (section 10.2). However, in Fort McMurray, this term is usually crossed out and an additional term is added indicating that the seller will pay for title insurance for the buyer instead of providing a Real Property Report. Most buyers, and even some sellers, do not even know what an RPR is, let alone what title insurance is for.

So what is a Real Property Report (RPR)?

The Alberta Land Surveyors' Association defines a Real Property Report as "a legal document that clearly illustrates the location of significant visible improvements relative to property boundaries." It is essentially a sketch of the bird's eye view of the property showing the boundaries and where the house, garage, shed, fence, driveway, and other improvements are located. RPRs are prepared by certified Land Surveyors.

What is Municipal Compliance?

Once an RPR is prepared, it can be submitted to the local government for review. In Fort McMurray, that would be the Regional Municipality of Wood Buffalo. The municipality reviews the RPR to determine if it is in compliance with all current local land use by-laws. If a property is not in compliance, the property owner has the option to seek a variance (essentially permission to be non-compliant with the by-law) or will need to take steps to remedy the issue.

What is the purpose of an RPR and Municipal Compliance?

When you are purchasing property, it is important to know in advance if there are any issues with the property that could cost you money to fix. Much like you do a home inspection to make sure the house is in good working order and is in compliance with safety codes and other laws, it is also important to make sure the property itself is in compliance with local land use by-laws. If not, you could be responsible for fixing issues, such a relocating a building or driveway, which can be very expensive. Knowing in advance what you are purchasing is important, as it allows you the opportunity to shift responsibility for remedying defects to the seller or make the decision not to purchase the property.

What is Title Insurance?

Title Insurance is similar to other forms of insurance you may purchase, such as travel insurance or home insurance. It protects you from the financial repercussions of issues with title which you are not aware of now, but may be discovered in the future.

Like other forms of insurance, title insurance is not perfect. It does not protect you from the hassle of dealing with the issue, such as relocating a building. It also does not protect you from issues that you have knowledge of (like "pre-existing conditions" for travel insurance). The purpose of title insurance is to protect you from suffering a financial loss as a result of defects with title. The insurer may choose to pay you out or fix the problem.

Title insurance can also protect you from title fraud and other issues that an RPR would not identify. It is important to carefully read your policy so that you know what you are covered for and what you are not covered for.

Why use Title Insurance?

The simple answer for why seller's offer title insurance instead of obtaining an RPR is that it is cheaper and faster. The cost of title insurance does depend on the value of the property (and mortgage), but is usually only a few hundred dollars. It is a rather straightforward application process and your lawyer can usually receive the insurance policy within days of applying. RPRs, however, can cost thousands of dollars and can take weeks to complete, depending on how busy local surveyors are. In addition, the RPR needs to be submitted to the municipality to be reviewed for municipal compliance which can also take time. With closing timelines often less than a month, most buyers and sellers would rather not wait for an RPR.

Another reason many sellers prefer to provide title insurance, rather than obtaining an RPR, is that when they purchased the property, they also were provided title insurance in lieu of an RPR. The sellers may not know if the property is in compliance so would rather not risk finding out there is a problem right before trying to sell the property.

From a buyer's perspective, it is also important to note that most mortgage lenders will require a recent RPR before they will release mortgage funds. The definition of "recent" will depend on the individual lender, but most prefer the RPR is less than a year old. The contract does not state that the seller needs to provide a recent RPR. Most lenders will accept a lender's policy of title insurance in lieu of a recent RPR. Even if the seller is providing you with an RPR, you may still require title insurance. Some lenders will even insist on title insurance, even if there is a recent RPR.

Do I have to accept Title Insurance from the seller?

The easy answer is no, you do not have to accept title insurance from the seller in lieu of an RPR and municipal compliance. The Residential Purchase Contract is a legal contract. You cannot be forced to accept any terms, or the deletion of terms, that you do not want to.

However, the seller also cannot be forced to sign a contract requiring them to provide an RPR. If you do not want to accept title insurance in lieu of an RPR, or any other term the seller may insert or delete from the contact, the seller does not have to sell the property to you and may decide to try to find another buyer.

Where can I find more information about title insurance?

For more information about title insurance, talk to your lawyer. You can also find more information on the following sources:
Real Estate Council of Alberta:
Insurance Bureau of Canada:
First Canadian Title:
Chicago Title Insurance Company:

The within blog is for informational purposes only and not for the purpose of providing legal advice. You should contact your lawyer to obtain advice with respect to any particular issue or problem. Use of and access to this blog or any of the links contained within it do not create an attorney-client relationship between Corinna Stevens and the user or browser. The opinions expressed at or through this blog are the opinions of the individual author and may not reflect the opinions of the firm or the profession. Any links provided within the blog are for informational purposes only and not for the purpose of providing legal direction or advice. The author does not guarantee the accuracy of any information contained in the within links.

What is Title Insurance? was originally published on The A-Team Real Estate Blog

Friday, January 19, 2018

Around Town: Fort McMurray News (Week of January 19)

It’s time for another edition of our weekly column from the A-Team. Here is some important news for this week.

More homes were sold last month at a lower price based on the new report released by Fort McMurray REALTORS®. From Mix News:

More homes sold in December; average price drops

New numbers released by Fort McMurray REALTORS® show more homes were sold last month at a lower price.

According to their numbers, 37 homes were sold in December 2017 at an average price of $564,832, compared to 27 in December 2016 at $676,778.

In a press release Fort McMurray REALTORS® wrote that the average selling price is down, they are also seeing a decrease in the number of homes listed which may stabilize housing prices. Via

The decrease in the number of listed homes could, in turn, stabilize housing prices, according to Fort McMurray REALTORS®. Check out our recent blogs on the topic for more information!

The task force of WBEDC or Wood Buffalo Economic Development Corporation is looking for candidates to fill its board of directors, according to Vincent McDermott of Fort McMurray Today:

WBEDC looking for board of directors

The WBEDC's mandate is to provide the municipality with guidance and leadership regarding economic growth. This could include attracting new business and investment, expanding tourism and attracting major events to the region.

It will exist at an arms-length capacity to the RMWB, with the municipality acting as the group's sole shareholder.

Council approved unanimously the creation of the taskforce during a meeting on Nov. 28, 2017. Approximately $8 million was set aside to get the group going.

The first steps for the board will include forming the direction, strategy and values of the organization, as well as appointing a Chief Executive Officer. h/t

The board will include business leaders and representatives from industries across the Wood Buffalo region.

[caption id="attachment_28193" align="aligncenter" width="300"] Credit:[/caption]

Lastly, it was reported this week by the Business Development Bank of Canada that economic optimism in Alberta is the highest it's been for quite some time:

Oil Prices And Job Creation Lead To Thriving 2018 Economic Outlook

Pierre Cleroux is the BDC’s Chief Economist and he tells Mix News there were significant improvements to the economy in 2017.

“We’ve seen the oil prices improving and the Alberta economy did quite well – much better last year than the year before. So, I think that’s the main reason why small business owners are so optimistic about the economy.”

According to the report, Alberta business owners plan a 12 per cent increase in investments in 2018, with entrepreneurs planning to spend $330,000 on average for investments.

The study states that business confidence is also the highest it’s been in three years, with 68 percent of entrepreneurs expected to see their revenue grow this year. read more at

The news of the improving economy bodes well for Fort McMurray, which is heavily affected by investments in the oil sector.

That’s all for this weeks’ roundup. Check back on The A-Team blog for more news and updates on Fort McMurray.

The following post Around Town: Fort McMurray News (Week of January 19) See more on:

Wednesday, January 17, 2018

Pitfalls of Pricing Your Home Too High When Selling

It's common knowledge that if a house isn't selling, then there must be something wrong with the home itself, or the way it's marketed, specifically its price. It's understandable that home sellers want to make a profit on their home. That is why most of them think that it is alright to price their home so high. Today's post explains why it's advised to avoid overpricing your home.

It goes without saying, but overpricing your home will lower the number of offers you receive. A recent post from Your White Knight explains why pricing your home too high discourages buyers:

Discourages possible offers

An overpriced home discourages prospective buyers from making offers, if the difference between the asking price and the todays market value is substantial. Many buyers choose not to waste their time on overpriced homes, and prefer to spend their energy looking at homes that appear to be a good value. Via

It's simple: home buyers usually have a price range that they take note of when they are looking to buy a house. If you overprice your home, then you'll only cater to a few people who are willing to spend a huge amount of money. Chances are, though, they are looking for a much better house than you might offer.

The next reason to avoid overpricing is it doesn't get you showings. Home buyers will avoid seeing a home that they feel is overpriced. Showings can lead to the next phase of the buying process, so cutting out that stage does a number on your prospects:

No showings

Ninety percent of getting a home sold in a reasonable time frame is pricing it right. Nothing else really matters. You can have your home mentioned in a million, trillion blogs and have your listing on 350 websites, but if it’s the wrong price in a buyer’s market it won’t sell, no matter how hard your realtor works.

Buyers are sophisticated and well-educated. They have on-line access to every home for sale.If your home is overpriced, they won’t bother to look at it or make you an offer. h/t

This is in line with the first reason above: home buyers are knowledgeable and they won't bother making an offer for a house that they think is overpriced.

Lastly, pricing too high gives neighboring houses an edge. It makes sense: there isn't likely to be that much home variation in a neighborhood, so if you manage to make everyone else look like a bargain, you're doing yourself a disfavor:

Neighboring properties are priced lower

Selling a home can be emotional. Often, high listing prices are the result of sellers adding sentimental value. It is important to consider the listing price your real estate agent suggests. They have looked at final sales prices of comparable homes in your neighborhood before determining the value or your home. If your home is priced above neighboring properties, you could very well be asking for more than what your home is worth in the eyes of prospective buyers

If your real estate agent suggests a price, don’t pressure them to list your home at a higher value. Read more at

It's not very useful to make your competition a much better option than your own home.

Before settling on a listing price for your home, it's important to do the right market research. If you're looking to sell your home, give the A-Team a call.

[caption id="attachment_28182" align="aligncenter" width="300"] Overpricing your home sells your competition because they have a lower price![/caption]

The following article Pitfalls of Pricing Your Home Too High When Selling is republished from The A-Team, RE/MAX Fort McMurray

Sunday, January 14, 2018

New Home Listings in Fort Mcmurray: Where Are They?

Fort McMurray's New Listings

You may be searching for your forever home, or perhaps you plan to stick around for just a few years and are just sick to death of paying rent. Maybe that Syncrude or Suncor money is burning a hole in your pocket (housing benefits).

You may also be wondering, “where are all the listings?!”.

Let’s say you’re ready to retire, so you’re thinking of selling. The likeliest thought you might be having is “is now a good time to sell?”. Not compared to the past, but compared to the future. What should you do to maximize your return and minimize your stress?

In this short blog, I’ll try to give as much info as possible to help you...

A Changing Market

We have lower inventory on the market this year than we did last January.

I’ll show you what I mean...

When we’re studying the market, we regularly study the same area: urban Fort McMurray. In the table below, we see that the total number of all property types (less vacant lots) listed on the Fort McMurray MLS® has fallen:

[caption id="attachment_28160" align="aligncenter" width="611"] Inventory of Homes listed on the Fort McMurray MLS® (Urban Areas) [/caption]

This is a natural process: Demand was reduced by approximately 50% as a result of the oil market slump, which caused prices to slip over time, and so supply has reacted by bringing fewer homes to the market (owners now find it relatively harder/less desirable to sell). In turn, the outlook for prices becomes less negative as the gap between supply and demand is closing.

What does this mean for you as a buyer? Well, this year you might already be finding that you have less choice.

If you are looking for a handyman special, you’re still probably having a really easy time, because of those 517 listings, a lot of them are fixer-uppers (close to 20% are foreclosures or court sales). But if you are looking for a real gem, especially in the lower price ranges, you may be starting to struggle.

In general, you may feel less relaxed generally when looking for homes as you would have in recent years as there is the same (or greater) volume of buyers to compete with, but for fewer listings.
Let’s say you’re thinking of selling your home. When’s best? Well, a lot of that depends on your view of the future and your view of the oil market, interest rates, employment, etc. But there are a few things we know:

Generally, if you have a quality product, especially one in a non-luxury price range, with proper placement, we will be able to generate a significant amount of interest for you due to the accuracy of our pricing and our powerful marketing. Even during the darkest times of the last 3 years, we didn’t struggle to sell homes, so now we get to leverage that marketing power in a different way: Careful, premium pricing.

This spring, there’s reason to get to the market early, as we know there are hungry buyers out there already. We are still in a buyer’s market (prices falling slightly), so there’s possibly still some added incentive there, too. It’s hard to say though, as prices tend to rise in balanced markets in the spring months. The best answer is “it depends on what you have”, so it’s best to receive tailored advice from one of our specialist listing agents.

When Will New Listings Come On The Market?

Right about now (the funk soul brother).

Here’s a chart:

[caption id="attachment_28162" align="aligncenter" width="842"] Chart: New MLS® Listings in Urban Fort McMurray (Not Including Lots)[/caption]

As you can see, in the last quarter of each year, the market tends to produce very few listings, but from January to July, our market typically produces at least 150 new listings a month. Buyers can rest assured that there will be fresh inventory this year, so one of the messages is “don’t panic”. Just be aware that if we transition from a buyer’s market to a balanced market, then you’re just going to want to tweak your strategy a bit.

Our buyer’s agents are highly trained in working with you from consultation to key-release to find and secure the best properties for the best possible prices. Through their wit and experience, they have access to homes not currently listed on the MLS®.

Another thing to remember is that we just went through Q4, which typically is when we see a lot of expiries. Many of these homes will now be re-listed with more accurate pricing:

[caption id="attachment_28161" align="aligncenter" width="842"] Chart: Expired MLS® Listings in Urban Fort McMurray (Not Including Lots)[/caption]

Summary: Not Where, but When?

We have seen that there are two broad trends to watch:

  • The market is slowly balancing
  • Seasonal trends

If you are active in the market as a potential buyer or seller of a Fort McMurray property, then you’re going to want to keep an eye on both of these. We’ll keep you posted in the blog on the balancing process, but it is advantageous to have a connection at The A-Team who can give you way better advice when they know the ins and outs of your situation.

Regarding the time of year (and this message is especially directed at potential home buyers): Even during the winters of the bust (2014-2017), we struggled to find quality inventory. More and more good homes are being listed every day. So far, for example, we have seen 57 non-lot listings come to market in the urban area we study. For example, our team is listing 5-10 homes over the next two weeks, and they’re nice places.
So it’s not so much where are all the listings, as when will they appear. Listings come to market:

i) In the first two quarters.
ii) When prices incentivize people to list.

In light of b), I think it’s a good idea to end on a cautionary note for potential home sellers. We do know a lot of potential sellers who, if market prices were any higher, would list their homes for sale. It’s a reminder that this correction has been extremely painful for homeowners and serious for the town. After large corrections like this, the market that often comes after a buyer’s market, is a balanced market. Only time will tell though and there is so much we don’t know.

Hope this helps and thanks for reading: If you enjoy our blogs, please consider sharing and subscribe to the newsletter.

New Home Listings in Fort Mcmurray: Where Are They? Read more on: The A-Team, RE/MAX Fort McMurray

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