Understanding Easements & Right-of-Ways

Easements (the most common being a right-of-way) is an existing agreement that gives one party (e.g. an adjacent land owner) the right to use another’s property to her benefit.  A good example of this would be a right-of-way in the form of a driveway or path across a neighbour’s lawn to provide access to a locked parcel of land or waterway. These agreements usually come about by way of neighbourly agreements, with or without financial compensation, or by government intervention (for example, if the provincial power corporation needed to install a line through a rural woodlot). Easements and right-of-ways are automatically transferred from one owner to the next and exist in perpetuity unless released by the dominant party (i.e., the party who is granted access). Now that we have an understanding of how easements work, let’s consider an example of one and how it might affect the value of property.

Let’s say you are considering the purchase of a nice parcel of land in rural Nova Scotia that you consider to be perfect for building your dream home. Everything checks out: the view is perfect, the lot is private, you can obtain all necessary permits, and the price is great! But upon closer inspection, your REALTOR® examines the deed and reveals a right-of-way running across the lot to an adjacent land-locked parcel of land. This right-of-way, currently across a narrow gravel path, is wide enough to construct a private road to municipal standards, and the owner of this land happens to be a subdivision developer in the area. Looking ahead to the future, it is foreseeable that this right-of-way could be used to the developer’s advantage: he maintains the legal right to install a proper road and potentially subdivide his parcel into building lots. Suddenly your peaceful retreat is a high-traffic subdivision; is this reflected in the asking price of the property? I’ll admit this is an extreme example, but worth considering. My point? Consult with a local expert who knows the area and how to interpret every aspect that might affect the value of a property. After all, if the asking price is too good to be true, it probably is!

A real estate geek, and proud of it!

I’d like to take a moment to highlight my experience and expertise with real estate-related technology and the advantages of working with a tech-savvy REALTOR®. I feel like I might be giving away some really useful info to my competitors here, but then again, you can’t imitate experience!

Speaking of experience, I spent about 15 years in the Information Technology industry, which provides me with an excellent understanding of Internet marketing and presence management. I obtained a Bachelor of Business Administration degree (with a focus in marketing) from Acadia University. During this time I ran several successful Internet-based businesses with my peers.

I am a keen follower (and developer) of new industry-specific marketing techniques, both physical and virtual. I employ these techniques to improve the visibility of my listings online; for example, through the use of dedicated domains, search engine optimization, analytics tracking, google ad-word campaigns, gis/mapping, CRM buyer management, etc. I am currently in the process of overseeing the development of a new website for RE/MAX Banner Real Estate which will employ cutting-edge full-MLS search filtering and categorization techniques. This will make searching for property in the Annapolis Valley amazingly easy and intuitive.

When evaluating the market value of a property (to help determine a list price), I employ a complex and proprietary database + spreadsheet system that I developed with the assistance of a certified home appraiser. My approach to property valuation goes beyond simple A, B & C comparison of similar, recently-sold properties.

A few other tidbits:

  • I fully digitize all pertinent (non-sensitive) records for fast recall any place, any time (even while on the road).
  • Generally speaking, I almost always reply to emails & text messages immediately (unless I am in an appointment or driving), day and night, 7 days a week.
  • I’m a photoshop whiz and amateur photographer. My listing photographs often include panoramic shots and vibrant colours; after all, first impressions are everything!
  • I’m an avid graphic artist & web developer, I design all of my print & web advertising in-house, by myself. The perfectionist in me wouldn’t have it any other way!
  • I maintain a free, online chat service designed to help buyers and sellers with their real estate related questions, including quick, painless answers to questions about my listings.

This stuff is important, and I take these aspects of my job very seriously. I encourage you to read my November 29, 2011 article Five technology-related questions to ask every REALTOR® you interview for more insight as to why!

The process of making an offer: the cards are stacked in your favor!

If you’re a first-time buyer, or haven’t recently gone through the process of making an offer, this article is for you. In this article I hope to alleviate some of the stress and mystery surrounding the process of offering on property. All too often I find that buyers, by no fault of their own, are misinformed about the Agreement of Purchase and Sale and what it accomplishes; I’m here to set the record straight!

In the province of Nova Scotia, consumers have wonderful protections put in place by the Real Estate Trading Act of 1996. Our act is so good and so comprehensive, that other provinces and jurisdictions have copied it. Without getting into too much boring detail, you should know that it is in place primarily to protect you, the consumer (in part through the regulation of me, the REALTOR®!)

Let’s cut to the chase. One of the results of the Real Estate Trading Act was better, standardized forms, such as the Agreement of Purchase and Sale. This form outlines to the seller the price that you (the buyer) are willing to pay ONLY in the event that a certain terms and conditions are met, to your satisfaction, by a certain date. It is by no means a commitment to purchase until these conditions have been met to your satisfaction.

I won’t cover every single condition in this article (besides, every situation is different), but I will hit on some of the major considerations that most buyers will come across. Please note that this is not to be taken as advice for any particular situation, these determinations must be made on a case-by-case basis. That said, here are a few examples of what protections you can put in place to ensure what you’re buying is to your liking:

  • Financing – your offer is subject to your ability to obtain adequate/acceptable financing, at a specified interest rate.
  • Home Inspection – you are entitled to conduct a professional or informal inspection of the property to ensure it meets your standards.
  • Water & Septic Tests – you may wish (or be required by your financer) to inspect/test water and sewage systems on the property.
  • Lawyer’s Approval – the offer is subject to the approval of your legal counsel; this could, for example, include verification that there are no liens or other encumbrances on the property.
  • Permits – especially important for vacant land purchases, your offer is subject to verification that building, septic, driveway and/or other permits are obtainable.
  • Insurance – most offers should be subject to ensuring that suitable property insurance is obtainable on or before the closing date.

As you can see from this partial list of conditions, a lot of things can affect your willingness (and/or ability) to purchase a property. That said, I’d like to re-iteriate that even though you are offering a certain price for the property, and may come to an agreement on this after some negotiation with the seller, you are not committing yourself to the sale until these conditions have been met. I generally recommend that buyers set one date for all conditions, usually 7-14 days after the offer is accepted, to accomplish these tasks. Should anything fail within this time (for example, the building inspection reveals asbestos and you need to back out based on this), the offer can be legally nullified and any deposit returned.

To summarize and re-enforce, the  Agreement of Purchase and Sale is in place to protect you and your interests, and to a lesser degree, those of the seller. It allows you to work out a purchase price with the seller, but perhaps more importantly, ensures that no-one else can step in and purchase the property from under you. This is especially important if you are bidding on a foreclosure or other high-demand property. If you’re in this sort of situation, get your bid accepted early to protect yourself from other buyers.

Happy bidding!