Skip to content
Sponsored Content

What savvy buyers know before purchasing real estate

Wishart Law Firm says you should be aware of these unique considerations before buying a camp or summer home

Two years of pandemic restrictions have led to mind-numbing cabin fever and a desire to start enjoying life again. 

For many, that includes purchasing a summer home or camp. 

But with high demand and low inventory, many people are making hasty home buying decisions that could leave them up the creek without a paddle, facing some ugly and costly surprises.

Wishart Law Firm, Northern Ontario’s premier law firm, breaks down some unique considerations when buying any residential or commercial real estate.

The offer is the deal, so you need to be alert

The Agreement of Purchase and Sale is the written, binding contract. Paul Cassan, a partner at Wishart Law Firm said, “People often think they’ll put in an offer and then negotiate further because the contract comes later. If accepted, the offer is the deal, so you need to be alert.”

Cassan added that going off-script and adding conditions of sale on a handshake basis can also be a pitfall in the deal. “There have been circumstances where sellers offer to sweeten the deal by promising movable items like boats and riding lawn-mowers outside of the Agreement of Purchase and Sale. If they are not written into the agreement, they are not part of the real estate deal, and a purchaser may have significant difficulty obtaining those items.”   

Waiving financing conditions is a gamble

“In Sault Ste. Marie’s hot real estate market, there has been an increased sense of desperation among buyers,” said Wishart’s Matthew Shoemaker. Offers are only being accepted in a narrow window and negotiating is almost impossible. “When the competition is stiff and a potential buyer wants to present the best offer, oftentimes they will waive financing conditions, even when they don’t have a mortgage lined up . If you can’t get an extension, you are committed to buying that house, on that date, for that price, whether the bank gives you the money or not.”

This has led to some buyers either having to borrow from parents, cashing in their RRSPs (which could have compounding financial implications) or, being in breach of contract and at risk of being sued. Shoemaker said, “In real estate deals of any kind, so many things can go wrong.”

When the family jewel turns into family kryptonite

In contrast to your home, a camp is more likely an investment property and can come with tax implications that require attention and planning. “You should plan for the sale of your camp at the time of purchase,” said Cassan. “This includes keeping a file of all your receipts related to improvement costs. These can be used to offset some of the capital gains tax at the time of sale.”

“Also, consider planning for succession at the time of purchase,” added Shoemaker. “If you don’t determine how to leave the camp to your beneficiaries, it could end up costing a lot in estate litigation, and that’s an issue people really don’t think much about.” Summer home succession should be assessed every few years, or at every significant family event (like marriage, death or the birth of new kids/grandkids).

And remember, gifting a camp to a child or loved one will not avoid capital gains taxes.

Seasonal home restrictions

You should consider zoning and access issues. Some camps are only allowed to be occupied seasonally, or others might be on roads that are not maintained year-round. Cassan said, “Even with title insurance, it’s important to pay attention to the zoning of any property you buy because zoning bylaws will restrict your use.”

Water and septic are crucial consideration

Mortgage approval at a camp is dependent on a clean source of drinking water and a proper way to dispose of sewage. Cassan said, “If you don’t have potable water, or your sewage system could pose an environmental risk, a bank likely won’t lend you the money to purchase the camp. If, as cautioned against above, you’ve  waived financing conditions, what do you do then?” It’s critical to understand and confirm the state of the water and septic on the property before any agreement is reached or at minimum as a condition of the offer. 

Closing a record number of real estate deals

In April, Wishart Law is on track to close over 150 real estate deals, setting a firm record for deals closed in a single month. Cassan said, “In one month this year, we’re going to close a record number of deals, which shows our firm continues to strive for excellence after 120+ years in business.” The firm has built up its capacity to easily do more deals, more efficiently. We have closed transactions ranging from regular residential purchases to commercial transactions worth a few hundred million dollars for publicly traded companies. “We truly have the capacity to handle any deal sent to us”, stated Cassan.

Wishart has lawyers and clerks focusing exclusively on real estate but their level of service does not end there. “The depth of experience and knowledge that we have is a huge asset,” said Cassan.

From dealing with the tax implications for an American selling a property in Canada, to launching a new business, expanding a corporation, or figuring out how the summer home can be left in your will, Wishart Law’s legal team can do it all. With access to accountants and financial planners, there are no limitations to the advice they can offer a client.

Contact Wishart Law at (705) 949-6700 or visit: