Blistering hot real estate markets have buyers seeking bargains and banks handling more requests to finance remediated marijuana grow ops.
What do buyers need to know?
Illegal grows can leave a home in serious disrepair. Moisture, pesticides and fertilizer can soak into structures and bad wiring jobs can put occupants at immediate risk. But that’s a worst case scenario and homes used for just a handful of plants or those that have been fully remediated are regularly deemed safe by local officials. Still, it doesn’t mean you’re going to have an easy time finding someone to loan you the money to buy one.
Why don’t banks like to finance former grow ops?
Lenders shy away from even the most carefully remediated homes because of the risk of future problems like mould. If that shows up, their investment — and yours — is at risk. Bruce Schouten, the chief risk officer at Coast Capital Savings, said lenders who do finance grow ops can face a risk to their reputation. That said, some will still lend — just for a higher rate than normal.
Is the stigma around former grow ops well-founded?
Consider this: A home with a leaky roof can take on a lot of moisture that could turn into mould. But put on a new roof and the problem is erased. That was the analogy used by Harry Kullman, a Kelowna-based realtor who has experience listing a remediated grow operation. Despite that, he said realtors should be up front about a home’s history.
How many remediated grow ops are out there?
It’s hard to say. The City of Vancouver has issued more than 2,450 reoccupancy permits for former grow ops since 2000. The city has seen steadily fewer of them starting around 2002 — one year after (now defunct) federal regulations permitted medical marijuana users to grow their own supply or designate someone else to grow it for them. Each jurisdiction has its own rules on remediation.
How often do former grow ops come onto the market?
In recent weeks there have tended to be a small crop of remediated grow ops on the market at any given time. Among new listings this week was a $788,000 five-bedroom home at 16849 60 Ave. in Surrey. Nearby four-bedroom homes were listed for more than $800,000, and the sellers of a five-bedroom house in the neighbourhood listed it at $1 million.
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