What are some of the things I need to consider when I start looking for a cottage to buy?
Recreational properties are a hot commodity right now. Last year saw significant increases in the number of cottage buyers, and reports from brokerages indicate that cottage sales are continuing to climb this year. You’ll want to educate yourself about navigating a robust market where you may encounter multiple competing bids on properties.
But before you start shopping for a cottage, you may need help to understand the many ways they differ from city properties. That’s why I recommend you hire a real estate salesperson and other professionals experienced with recreational properties and their unique characteristics — including access to high-speed internet.
For example, many cottages are not hooked up to municipal water systems. That means the water source may be a well or a lake, and it’s important that you hire a specialized company to conduct a water quality test to make sure the water is safe to drink.
If the property you are considering is not on a municipal water or waste system, it is often prudent to include a clause in your agreement of purchase and sale that allows you to confirm that the water is safe to drink (potability) and that there is adequate supply (flow rate), as well as having a septic inspection to confirm the system is in good repair and was installed following all government guidelines. Be aware that most lenders require the flow rate and potability tests be completed before advancing mortgage funding.
As a condition of sale, it is a good idea to have the seller pump out the septic tank before you take possession.
I also strongly recommend you get a home inspection done by a professional, who has experience with recreational properties, to identify any issues with the cottage’s major systems, including heating, cooling, plumbing and electrical.
In terms of the property itself, it would be a good idea to ask for an existing survey. If there isn’t one, consider having a survey done.
Zoning and access are considerations, too. If the property is zoned “seasonal,” it’s possible the municipality won’t provide emergency services or road plowing in the winter.
Are you looking at a property on or close to a body of water? You should establish whether you have direct access to the water if the property is on or near it, or access rights through a nearby property. Ask your real estate rep to confirm whether you will own the shoreline and, if not, whether you have the legal right to use it. A local real estate lawyer can determine how to ensure access to your property if you must cross another to get to your own.
One final thought: all properties have carrying costs, and that means you will have annual insurance and property tax expenses, along with mortgage and utility payments.
If you have a question for Joe about the home buying or selling process, please email firstname.lastname@example.org.
Joseph Richer is Registrar of the Real Estate Council of Ontario (RECO). He is in charge of the administration and enforcement of all rules that govern real estate professionals in Ontario. You can find more tips at reco.on.ca, follow on Twitter @RECOhelps or on YouTube at http://www.youtube.com/RECOhelps.