Tag: real estate

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Cottage Life

RBC predicts recession could hit early next year. Here’s who will be most affected

Photo by Shutterstock/JHVEPhoto

The Royal Bank of Canada (RBC) has bumped up its recession prediction. Previously, the bank suggested that the Canadian economy might experience a moderate contraction in 2023. But in a report published on October 12, experts are now saying that Canadians should expect the recession to hit in the first quarter of the new year.

The exact date remains vague as experts have difficulty nailing down when a country enters a recession. Most define it as two consecutive quarters of declining gross domestic product. A more obvious sign is a surge in unemployment.

But what does a recession mean for cottage owners? According to Claire Fan, an RBC economist and one of the authors of the report, it could make owning a cottage more expensive.

Canada’s inflation rate remains aggressively high, sitting at seven per cent. This means that demand is still outpacing supply. The Bank of Canada is working to lower inflation to two per cent by raising interest rates. On September 7, the bank raised its policy interest rate to 3.25 per cent.

This makes it more expensive for Canadians to borrow money, including cottage mortgages. Whether a cottager’s mortgage payments will be impacted during the recession depends on the type of mortgage they’ve taken out, Fan says.

“A fixed-rate mortgage would see a much smaller impact from rising interest rates than a variable mortgage,” she says. This is because a fixed-rate mortgage is locked in for a certain number of years at a set interest rate, keeping monthly payments consistent. Whereas the monthly payments for a variable mortgage fluctuate with the Bank of Canada’s interest rates. However, a cottager with a fixed-rate mortgage could see a significant jump in their payments if their contract comes up for renewal when interest rates are still high.

Presently, there are no signs of interest rates going down. RBC says it expects the Bank of Canada to raise its policy interest rate to four per cent before the end of the year as it continues to fight inflation.

The rising interest rates are having a cooling effect on Canada’s real estate market, including cottages. After the cottage real estate boom of 2020 and 2021, high mortgage rates are starting to slow sales.

According to RBC, property resale across Canada has dropped by 36 per cent since February. Despite the drop, cottage prices remain similar to their 2021 levels. But RBC says it expects the nationwide benchmark property price to drop 14 per cent by next spring. This could make it a good time to buy a cottage, if you can qualify for a mortgage.

Besides higher mortgage rates and a slower real estate market, a recession could also make day-to-day purchases more expensive for cottagers. Fan says the high inflation rate is putting price pressure on everyday goods, such as food and gas. If it costs $100 in gas to drive to the cottage, owners may reconsider the trip.

Plus, RBC says that between interest and inflation rates, the average household’s purchasing power is expected to decline by $3,000 in 2023. Purchasing power is the amount of goods and services a household can buy based on their income. “If a household buys the same things again next year, how much more would it cost? And if their debt levels stay fixed at where they are today, how much more could they be expected to pay for those liabilities?” Fan says. To calculate this decline in purchasing power, RBC looks at the inflation forecast and the average household’s gross disposable income.

Another recession issue cottage owners need to be aware of is job loss. RBC predicts that the jobless rate will reach seven per cent by the end of 2023. If a cottage owner lost their job, it could make it difficult to afford mortgage payments. However, thanks to an excess of job openings caused by the pandemic, RBC expects job loss to be moderate in 2023 compared to past recessions.

All this to say, the recession won’t be distributed equally, leaving some cottagers unaffected. “This will weigh most heavily on Canadians at the lower end of the wealth spectrum, particularly those whose disposable income has faded alongside pandemic support,” RBC says.

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Cottage Life

Common bylaws that every short-term rental owner should know

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In recent years, countless communities across Canada have implemented their own sets of short-term rental bylaws in an effort to reign in what some consider a loosely regulated industry. These regulations are typically handled at the municipal level, meaning they come in a wide range of different shapes and sizes. With so many different sets of regulations in place, it can be difficult to know exactly what rules are relevant for those looking to operate their own rental unit.

To help you navigate the maze of short-term rental regulations, we’ve compiled a list of some common and not-so-common bylaws and rules that should be on your radar if you’re at all interested in renting. Check with your local municipality to see exactly what rules are in place before renting out your property, but keep these in mind as you do:

Licencing Programs

Licensing programs have seemingly become the standard method of regulating short-term rentals. In many areas, you simply can’t operate a short-term rental property without a licence. These programs are typically used as the basis for other forms of regulation—they’re a way for local governments to account for the amount of renters in the area, ensure safety standards, and track other bylaw violations.

Here are a few common elements of licencing programs, that vary widely by community:

  • Cost: Applying for a licence can cost as much as $1,500, but most licences will likely be in the ballpark of several hundred dollars.
  • Length: How frequently you have to renew your short-term rental licence also varies by area, but it’s typical for them to be valid for one year at a time.
  • Limit: Some areas have placed a limit on the amount of licences their municipality will give out, meaning you may not be able to immediately obtain a licence if that limit has already been reached.

Property Standards

Property standards are incredibly common and are typically in place to ensure a degree of safety for renters and owners. Property inspections are frequently a mandatory step in obtaining a licence, but the minimum standards vary by municipality. Here are some common requirements you should be on the lookout for:

  • Parking: Depending on the bylaw, the availability of parking may determine the amount of guests you can host. Mainly, you should ensure that guests have enough space to park on your lot, so that they aren’t blocking off roads or leaving their vehicles on other properties.
  • Septic: You may need to have your septic system inspected to ensure that it has the capacity to handle the amount of guests you intend to host.
  • Room Density: Like parking, the amount of rooms you have may determine the amount of guests you can host. It’s common for municipalities to limit occupancy to two guests per bedroom, but some bylaws put a hard cap on the number of occupants regardless of property size.

Zoning Requirements

Some communities have placed restrictions on the types of buildings and areas of the community that can be rented. For instance, the township of Seguin placed a ban on waterfront rentals, Sarnia banned residentially zoned rental units, and Collingwood prohibited the operation of none bed-and-breakfast style short-term rentals (units where the owners live in the building alongside their guests are considered bed-and-breakfast style rentals). Be sure to check how your property is zoned in case there are any local bylaws that restrict your ability to rent.

Emergency contacts

Many bylaws state that short-term rental owners must have an emergency contact who can be reached in emergency situations. In some places, these contacts only need to be reachable by phone, but in others, emergency contacts must be able to attend the rental property within a certain time frame (commonly, in under an hour), which often poses a logistical challenge for out-of-town rental operators who live far from their units.

Rental Periods

Most short-term rental bylaws place a cap on the amount of consecutive days a unit can be rented in order to be considered a short-term rental—this is typically around 28 days. Units rented beyond that period are often no longer considered a short-term rental. Recently, the Township of Tiny drafted a bylaw which would place a limit on the amount of days units can be rented.

Penalty System

The enforcement of short-term rental regulations will also vary depending on your community’s bylaws. Some municipalities enforce regulations through standard fines. Others have systems in place that escalate penalties for repeat offenders, often meaning the more offences a short-term rental owner commits, the higher their fines will be. It’s important to understand your municipality’s enforcement system as the level of punishment ranges anywhere from the issuing of minor fines, to the revoking of a licence.

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Cottage Life

Listing of the week: 2,000 sq. ft. totally off-grid home near Parry Sound

exterior of 558 highway 518

Exterior of 558 Highway 518

open concept kitchen and dining area

Kitchen and dining area

inside of bathroom 1 with a shower stall

Bathroom 1

a bedroom with a single bed and open closets

Bedroom 1

spacious bathroom 2 with shower stall

Bathroom 2

spacious and bright bedroom with a queen bed in it

Bedroom 2

spacious bedroom with bath tub in the corner

Bedroom 3

Outside on one of the deck with lounge chairs

Deck space

screened-in porch with lounge chairs

Screened-in porch

guest trailer with attached porch and fire pit outside

Guest trailer

558 Highway 518, Seguin, Ont. 

Lake: Heaslip Lake, Ont.

Bedrooms: 3

Bathrooms: 2

Lot size: 44.6 acres

Frontage: 641 feet

Asking price: $1,250,000

Taxes: $1,989

Listing date: Sept. 24, 2022

Listing agents: Phillip & Heather VanDuzen, EXP Realty

About the property:

44.25 secluded acres with a gated entry leading down a picturesque driveway to the main house. This one-of-a-kind approximately 2,000 sq. ft. home is completely off-grid! Powered by 7.25 kw solar photovoltaic system and deep cell battery bank with 1,500-amp hour storage. A generator in its own building provides backup power and peace of mind. 

An entertainer’s delight open-concept layout including a gourmet kitchen, six-burner stove, solid wood cabinetry, pantry, 1,000 sq. ft. of decks and Bluetooth ceiling speakers. Retreat to the great room and enjoy a cozy fire in the gorgeous stone wood-burning fireplace or relax outside in the screened-in Muskoka room while watching wildlife. This newly built custom home boasts three spacious bedrooms with plenty of closet space, two full beautiful bathrooms, plus a two-person soaker tub in the owner’s suite. Owner’s suite has its own walk-out balcony with raised gardens and sitting areas overlooking the forest filled with mature and newly planted trees. This home offers gorgeous views from every room. The quality of the workmanship is apparent at every turn. Trails throughout the property allow hiking, four-wheeling, snowmobiling, skiing all on your own property. Lots of Crown land behind including Heaslip Lake. Twenty-seven-foot guest trailer with attached porch and deck sleeps 8–10 people. Decrease your carbon footprint and live a more environmentally friendly lifestyle all with the convenience of being 10 minutes from Parry Sound and four minutes from Highway 400. 

What are the main selling features?

  • Off-grid
  • 44.25 acres of hardwood bush property with no neighbours in sight
  • 2,000 sq. ft. home

Have there been any recent upgrades?

  • Brand new build

Want more cottage real estate news? Sign up for our free enewsletter, The Key. You’ll receive timely stories about buying, selling, and renting to help make your cottage dream a reality.

Would you like to list your cottage on our website? Email listingoftheweek@cottagelife.com.

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Cottage Life

Halal mortgage company plans to expand to cottages in the next year

Photo by kenchiro168/Shutterstock

Rising interest rates have caused many Canadians to shy away from obtaining a mortgage. But that isn’t the case for the Canadian Halal Financial Corporation’s customers.

Thomas Lukaszuk, a former cabinet minister and one of the founders of the Canadian Halal Financial Corporation, says they’re still seeing dozens of applications filter in each week. “We launched this program on December 24, 2021,” he says. “On December 25, we had 167 applications filed.”

The reason for the Edmonton-based company’s ongoing success is that they’re catering to the underserved Muslim community.

Under Islamic law, Muslims aren’t allowed to accept or pay interest—the act is considered exploitative. That makes it difficult for a Muslim person to buy property. Financing options tend to be limited to traditional lenders, such as banks, who charge interest and use the money obtained through mortgages to invest in businesses that don’t align with Islamic tradition, such as cannabis shops and alcohol manufacturers.

As a result, many Muslims are left looking for an alternative. “Our clients are medical doctors, lawyers, people with very high incomes, but they’ve never had enough disposable cash to buy a house. So, either they’re renters, they have entered into informal arrangements with family members, they borrow money from each other, or they pool money until one family buys a house,” Lukaszuk says. “But it’s very laborious and extremely time consuming to do that.”

Looking to solve this problem, representatives from the Al Rashid Mosque in Edmonton, the first Mosque in Canada, approached Lukaszuk in 2019 to discuss the possibility of introducing mortgages that did not involve interest.

Lukaszuk had worked closely with the community during his time as a politician and had since been involved in building projects, familiarizing him with the mortgage industry. With over a million Canadians identifying as Muslim, it was clear to Lukaszuk that there was a need for trustworthy Halal financing.

Lukaszuk and his partner, John Stainton, a lawyer and businessman, spent the next two years working with the Al Rashid Mosque to iron out the details of acceptable financing. According to Lukaszuk, the group spent hundreds of thousands of dollars in legal fees, ensuring the mortgages could be upheld in Canadian court. The group even travelled to Al-Azhar University in Cairo, Egypt—one of the oldest Islamic universities in the world that plays a key role in overseeing Middle Eastern banks—to receive a pronouncement saying that the company was 100 per cent compliant with Islamic law.

Other Halal financing companies do exist in Canada, but few are as regulated as the Canadian Halal Financial Corporation. Each financing contract is audited by a religious committee who certifies that the transaction is compliant.

When an application comes in, the Canadian Halal Financial Corporation calculates the profit it expects to make on the transaction. It then adds that number to the principal and divides the amount among a certain number of monthly payments. This way, the monthly payments don’t fluctuate as they would with interest rates.

The borrower must also pay a minimum of 25 per cent of the property’s market value or purchase price up front and show that they have good credit history and sufficient income to afford the monthly payments.

To ensure the transaction is halal, the company doesn’t allow any third parties to enter into the contract. “We are the lender, so there are no secondary contracts, and there are no insurances on our mortgages,” Lukaszuk says.

Rather than borrowing from banks, all of the money used for the mortgages comes from the Canadian Halal Financial Corporation’s own resources, including investments in pension plans and private wealth funds. Each investment is reviewed by a committee of Islamic finance scholars to ensure that it’s compliant.

Providing Halal loans has made a significant difference to the community. In 2012, Nadeem Rahman, a member of the Al-Rashid Mosque, moved his family from the Greater Toronto Area to Edmonton so that his kids could get a better education. With no Halal loans available, he was forced to rent.

“I searched a lot,” Rahman says. “I saw that there was an organization in Manitoba providing Halal mortgages, but not in Alberta at all.”

Rahman’s family was living in a neighbourhood close to the mosque and his kids’ school, but it wasn’t ideal. Rahman laughs when he says he always wanted a house with an attached garage. “The weather here is crazy,” he says, referring to the winters. “As you age, it’s very difficult to go out, clean your car, and then take your family out.”

When the Canadian Halal Financial Company launched, it opened doors for Rahman. He secured a mortgage and moved his family into a detached home with a double garage.

He’s thankful to the company, but he hopes it continues to expand, offering loans on other things, such as cottages, campers, and cars. “There are a lot of people who want to buy something, but they still can’t do it,” he says.

Lukaszuk is well aware. While the company deals primarily with principal residence mortgages, he says over the next year, the company plans to expand across Canada and start offering financing for all types of properties, including cottages.

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Cottage Life

Is it time to switch from a fixed-rate to variable-rate mortgage on your cottage?

Photo by Amnaj Khetsamtip/Shutterstock

With the cost of borrowing on the rise, cottage owners might wonder if now is the right time to switch from a fixed-rate mortgage to a variable-rate one—or continue to weather the storm until borrowing rates begin to cool. 

After cutting interest rates to near-zero levels at the start of the pandemic to encourage spending, Canada’s central bank has hiked interest rates five times this year to tame soaring inflation, which has risen to its highest level in decades. 

On September 7, the Bank of Canada raised its key interest rate to 3.25 per cent, triggering higher borrowing rates for homeowners who are up for renewal on their fixed-rate mortgages or ones with variable-rate mortgages. In an environment of rising rates, more of your payment goes towards interest, which means it will take you longer to pay down your mortgage. (For example, as of writing, borrowers with TD Bank can expect to pay 5.24 per cent on a five-year fixed mortgage or 5.15 per cent on a five-year variable mortgage.)

Andrew Thake, a mortgage broker based in Ottawa, cautions cottage owners against getting swept up in the panic of rising rates. First and foremost, Thake says anyone with a variable-rate mortgage on a cottage should call their mortgage broker, not their bank. “A broker can give them a broader scope of the options available at their lender and dozens of other lenders.”

Thake says some lenders may fix the payment on the variable interest rate mortgage. “There are a select group of lenders where if rates go up and down, your payment stays the same,” he says. “And then within that payment, the mix of principle and interest changes.”

According to Thake, cottage owners can jump ship to a fixed rate for peace of mind, but it comes with risks. “If we look at charts of variable interest rates over the last 10, 20, 30 years, those who have gone with a variable rate tend to have done better than those who have gone with a fixed rate,” says Thake. 

The data backs this up. Canada Mortgage and Housing Corporation found that homeowners with variable-rate mortgages had paid an average interest rate of 4.14 per cent in the past 25 years, which is lower than the average 5.30 per cent fixed-rate holders paid over the same period.

There’s no penalty associated with switching from a variable to a fixed rate on your mortgage. “But if you ever want to switch from a fixed to a variable rate, you can’t do that without a penalty,” says Thake. “Plus, the penalties on fixed rates are typically quite large when we compare them to penalties on other types of mortgages.”

Thake says whatever decision you make, it’s important to make it with a long-term view in mind. “If you start to time the real estate market, it would be like timing the stock market, and most people don’t fare too well with that kind of stuff.”

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Cottage Life

Cottage real estate region: Pigeon Lake

Photo by Julie Cork

Big, shallow, and convenient, Pigeon Lake reigns as one of the most popular cottage destinations in Alberta. Sitting in farming country, an hour southwest of Edmonton and about two hours north of Calgary, the lake has more than a dozen communities spread along its sandy shore. The oval-shaped lake is not immune to late-summer algae blooms, but the Pigeon Lake Watershed Association is educating cottagers, local farmers, and businesses about best practices to improve water quality and has had some success.

A typical summer day hits the mid-20s with cool nights. The lake’s usually swimmable by Canada Day. While the water may be the main attraction, there’s plenty to do on land, including hitting the links at five golf courses. Trails wend through the forests in Pigeon Lake Provincial Park. Strict retention rules for the area help maintain excellent fishing. There’s perch, northern pike, and whitefish in the lake, but walleye is what most people are after.

Most of the communities around the lake are a mix of waterfront and backlot cottages, few farther than a street or two from water. There are boat launches, but no public marinas. Property ranges from $2-million waterfront estates to off-lake country acreages for a lot less, and from 70-year-old summer cabins to modern cottages. The Village at Pigeon Lake is the area’s commercial centre and social hub, with events throughout the summer, culminating with the Lakedell Country Fair.

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Cottage Life

5 (potentially) confusing cottage real estate terms

By Doucefleur/Shutterstock

“In my business, familiarizing buyers with what they need to know involves some new terminology,” says Chris Winney, a broker with Royal LePage ProAlliance Realty in Northbrook, Ont. Here are a few potentially confusing terms for cottage buyers.

Road access Wait, how is that confusing? There’s “road access” and “water access.” Simple! But this term can require some explanation “if part of the way into the cottage takes you from a township-maintained road to resident-maintained lanes that may criss-cross neighbouring properties,” says Winney. “That’s when using a local lawyer is beneficial; they know the area well and understand how the buyer may or may not be impacted by this situation.”

Cottage Q&A: If neighbours access their dock via our property, are we liable if they get hurt on our land?

Road maintenance fees “It’s important for buyers to understand that when they purchase a cottage that uses resident-maintained lanes for access, they need to accept that there will be an extra annual shared fee,” says Winney. Everyone who uses the road helps pay for the road: for maintenance—grading and dust control if it’s gravel, for example—insurance, and potentially snow plowing. (Even if you don’t use the cottage in the winter, your cottage association or road association may expect you to pay for winter maintenance.)

Cottage Q&A: How can we ensure everyone pays their share of road maintenance fees?

Crown land Any land, lakes, and rivers managed by the government. Is there any Crown land near the lake? “Having it facing or around your property is beneficial,” says Winney. “It’s a constant view, it probably means the lake is clean, and it provides everyone with privacy.” Not to mention trees. Everyone loves trees!

A guide to buying and building on Crown land in Ontario

Public access points This could affect how much boat traffic the lake gets. “Are there public access points on your lake or is it a closed system? On larger lakes, both residents and visitors can often put their boats in at different boat launches,” says Winney. On smaller lakes, you may need to own property to be able to boat there.

Lake level Well, duh: it’s the level of the lake! But you’ll want to investigate what controls it, and therefore, what can affect it throughout the year. “Is it spring-fed? Is it part of a river chain controlled by dams? Does the water level fluctuate to allow you to keep your dock in place in the winter?” says Winney. “Knowing this happens will reassure a buyer when the water drops at the end of October by five to six feet. Yikes if they didn’t know!”

15 real estate terms for first-time buyers

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Cottage Life

Cottage Q&A: Should I buy a cottage during a recession?

Photo by YAKOBCHUK VIACHESLAV/Shutterstock

Predictions of a coming recession have been thrown around a lot lately. Most experts say  Canada will be hit in 2023. To many Canadians, though, the Bank of Canada’s aggressive interest rate hikes, record-high inflation, and the current cost of living crisis make the recession feel like it’s already here.

For potential buyers looking to wade into the cottage real estate market, talk of a recession could make you second guess your choice. What will this do to the market? Is it actually a good time to buy? Before you panic, take a read through our guide. We’ll break down everything you need to know about buying a cottage during a recession.

What is a recession?

Even economists have trouble pinning down exactly when a country slips into a recession. The rough definition is that a country has entered a recession when it experiences two consecutive quarters of negative GDP growth. GDP increases when a country has a strong, productive labour force. That’s why a recession is often marked by high levels of unemployment.

Currently, the economy is coming off a high from the COVID-19 pandemic. While certain industries did suffer, demand in many, such as the cottage real estate market, skyrocketed. Thanks to low-interest rates and high savings, people were looking to spend. That, however, resulted in a high inflation rate and increased interest rates. These two factors lead to another recession marker: low spend.

How would a recession impact cottage prices?

Where they stand now, cottage prices remain high, says Haliburton realtor Shirley Rule. “In August, in Haliburton, the prices were actually up from a year ago, quite a bit. Now, the number of properties for sale is down by 40 per cent, but the sale prices were up,” she says. “And September seems to be holding its own compared to last September.”

According to Royal LePage’s 2022 Recreational Property Report, the average price of a waterfront property in Canada is expected to increase by 13 per cent this year to $640,710. Rule adds that despite the drop in sales volume, she’s still seeing demand, with multiple offers being placed on well-priced cottages with appealing shorelines that don’t need too many renovations.

This is a good sign that the market isn’t collapsing. But it still needs to be taken into consideration that cottages are a discretionary purchase. If a recession hit, the financial strain would likely cause sales volume to drop further and leave properties sitting on the market for longer. If this happened, it’s possible prices would start dropping to ensure the properties continued to sell.

But Rule points out that, unlike homes, there are only so many waterfront properties available at a given time. The limited supply could prevent a significant price drop. “There’s always going to be people wanting them at some point,” she says.

What are the pros of buying a cottage during a recession?

The pandemic brought a sellers market to cottage country. Not being able to vacation abroad, people started buying cottages as a way to escape urban centres. This increase in demand limited the supply of cottages available, driving up prices. According to Royal LePage, in 2021, the average price of a waterfront property jumped by 21.5 per cent.

But as borders have reopened and the Bank of Canada continues to hike interest rates, affecting mortgages, cottage demand has slowed. Rule says the market is starting to balance out again between buyers and sellers. If a recession hit and demand slowed further, power could shift to the buyer.

With less competition and cottages sitting on the market for longer, it gives you more leverage as a buyer. You can negotiate on price and include conditions with the sale. During the pandemic, demand was so high that buyers risked losing the sale by adding conditions, such as a home inspection. “It’s starting to get back into that now where a lot of our sales are conditional,” Rule says.

Cottage Q&A: What does selling “as is” mean?

She also advises people to be smart with their timing. Look to buy in the fall, Rule says. People who don’t want to take care of a cottage over the winter are looking to offload the property, increasing supply. Plus, summer’s over, so not as many people are thinking about buying a cottage, limiting demand. If you’re set on buying a cottage during a recession, fall is a good time to snag a deal.

What are the cons of buying a cottage during a recession?

A recession does, unfortunately, come with cons. Despite having your heart set on buying a cottage, you could experience some form of financial instability, such as losing your job. This kind of instability makes money lenders, such as banks, nervous. They don’t want to risk you defaulting on payments.

That’s why Rule stresses that you need to be certain you’ll qualify for your mortgage before putting in an offer. “The banks will ask for an appraisal. If the appraisal comes in lower than what [you’re] paying for it, then there are going to be issues,” she says. If this happens, the bank is unlikely to loan you more than the appraised value.

Mortgages are also difficult to qualify for right now. Rule says that the high qualifying standards of the current mortgage stress test are a major factor in slowing down sales volume.

Typically, during a recession, the Bank of Canada will lower interest rates to help stimulate the economy, as it did at the beginning of the pandemic. But currently, we’re coming off of a 39-year high inflation rate and the bank’s policy interest rate is sitting at 3.25 per cent, the highest it’s been since 2008. This means you’ll qualify for a lower mortgage amount than you would have a year ago, and your monthly payments will be higher.

There’s a chance that if we enter a recession, the inflation rate may drop and the bank can once again lower interest rates, allowing buyers to get better deals. But as it stands, experts are predicting interest rates to continue going up in the short term.

Regardless of whether we do enter a recession, Rule predicts that the wheels of the cottage real estate market will continue to turn. “There are still buyers out there who are eager to get something,” she says. “But they’re also being very picky about what to get. They want to make sure they’re getting what they want. You can’t blame them.”

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Cottage real estate region: Okanagan

Photo by Stan Jones/Shutterstock

The sunny Okanagan region, about a four-hour drive east from the Lower Mainland, is centred on 135-km-long Lake Okanagan and is home to the waterfront cities of Penticton, Kelowna, and Vernon—and the legendary Ogopogo lake serpent. Drier and warmer than the coast, this is a popular summer boating and cottage area. The water is clean and deep; the hills are rolling, arid, and dotted with productive orchards and vineyards. Penticton, Kelowna, and Vernon have excellent amenities, including many marinas and marine services. Watersports and the nightlife here attract a young crowd. There are also nearby ski resorts with condos and chalets.

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Cottage Life

Cottage Q&A: What does selling “as is” mean?

By Chizhevskaya Ekaterina/Shutterstock

My wife and I are looking to buy a cottage. The owners are selling it “as is.” Is this common? And is buying a cottage that’s being sold “as is” a good idea?—Bewildered Buyer

It’s not uncommon. Selling “as is” usually means: what you see is what you’re buying. The owners aren’t prepared to fix any problems discovered during an inspection. But there are different reasons for this language—it’s not always code for reno nightmare. “The term ‘as is’ can be a little ambiguous,” says Judy Forster of Forster Realty in Regina Beach, Sask. It’s typical in an estate sale or in a situation where the bank has foreclosed on a cottage. After all, “if the owners aren’t around, you can’t ask them to fix anything,” says Chris Winney, a broker with Royal LePage ProAlliance Realty in Northbrook, Ont.

15 real estate terms for first-time buyers

Other possibilities: the sellers don’t have the cash to deal with the fixes that the cottage needs, or they suddenly inherited the cottage and have no interest in tackling any renos. Or “as is” may have nothing to do with the condition, says Wayne William Heine, with EdmontonLakeProperty.com in Spruce Grove, Alta. These owners could be using the term to indicate that they want to sell the contents of the cottage too. “Some people say, ‘Hey, I just want to take my personal belongings and walk out of here.’ For buyers, that might be a good thing.” Especially if the owners leave behind a valuable comic book collection or bottles of 70-year-old malt whisky! (What? It could happen.)

A real estate agent’s tips for buying a cottage sight unseen

Still—and this goes for buying any cottage, in any condition—as a buyer, you have to do your due diligence. Get all the necessary inspections—duh—but also gather as much intel about the lot, the area, the lake, and the local politics as you can. Winney’s tips include reading at least three issues of the regional newspaper, visiting the property at different times of the day, and talking to the neighbours. “Almost anything that’s wrong with the cottage is fixable, but the environmental factors aren’t,” she says. “And if someone is putting pressure on you to make a decision, walk away. There are other properties out there.”

Got a question for Cottage Q&A? Send it to answers@cottagelife.com.