When a real estate property is sold, its sale price MUST cover all debts owing on the property. Otherwise, the buyers would need to inherit the seller’s liabilities, and no one would ever agree to that.
Specifically, the sellers need to include the following debts in their calculations when deciding the sale price:
- Mortgage or line of credit attached to the house;
- Writs – money owed by the seller that are registered wit the Courts;
- Property Taxes and Utility fees (hydro, gas, water)
- Work orders – did the seller do renovations without a permit, which would require the buyer to reverse in the future?
- Debts on furniture (PPSA) – furniture are often sold to buyer with the house. Are there debts on large items like fridges, home theatres, antiques?
- Rental items like hot water tank and solar panels – those require monthly payments for up to 10-20 years. As a buyer, do you agree with the monthly rent amount, length of contract, and the quality of the rented equipment?
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