Are you purchasing your first home? Maybe you are buying and selling at the same time? You could be having a custom home built or perhaps your children have all moved out and you are downsizing. Buying, selling or building a new home can be very exciting but it can also be stressful as it often represents one of the most important and largest financial commitments you can make.
At HART LAW OFFICE, we understand that realtors are explaining all about real property reports, compliances, holdbacks and asking you to sign contracts and the banks are explaining the different types of mortgage products on the market. Our focus at HART LAW OFFICE is to help you understand the process and make your experience of buying and/or selling a home a relatively easy and stress-free transaction.
At HART LAW OFFICE we have over 20 years experience in real estate and can work with you, your realtor and your banker/broker to make the experience a pleasant and happy occasion.
Here are some of the ways HART LAW OFFICE can assist and advise you:
• Purchase - You should have a lawyer review the Offer to Purchase Agreement to ensure you are being protected and that there are no hidden liabilities. We can assist in reviewing all legal documents that relate to title, insurance, property taxes and real property reports/compliance. Most importantly, we can assist you in obtaining proper title to the home once the transaction has concluded.
• Make your offer is subject to conditions for your own protection, such as:
1. Subject to financing 2. Subject to building inspection 3. Subject to lawyer’s approval 4. Ensure a current real property report (aka Survey) with compliance is provided for in your contract
• Always include a time limit for acceptance by the seller. That way, you will not be waiting for weeks to hear if your offer has been accepted or not and it allows you to start looking elsewhere if the seller does not respond by the deadline.
• Make sure the Offer to Purchase Agreement refers to the chattels that are being included or excluded in the purchaser.
• If you are planning on assuming an existing mortgage, make sure the mortgage is assumable by contacting the bank. Make sure you are clear on the terms and conditions of the mortgage.
• If at all possible, go to the bank to get pre-approved before you starting looking for a home. This will help to speed up the final approval process once you find your dream home.
• Make sure the Offer to Purchase Agreement includes a condition that the building and improvements on the land comply with existing municipal land use by-laws, zoning regulations and planning department requirements.
• Be aware of all closing costs so get estimates from the realtor, mortgage lender (CMHC / GENWORTH FEES) and your lawyer of the costs you will have to pay in addition to the purchase price.
• At HART LAW OFFICE we will work closely with you and your realtor and mortgage broker/banker to ensure the contracts suit your needs and protect your interests.
• We often are asked to review contracts before they are signed and we encourage buyers or sellers to always add in a “subject to lawyer review” clause in the contract. That way, we can review your contract and advise on what additional paragraphs should be added or removed to protect your interests.
• Sale – If you are selling a home HART LAW OFFICE can assist by reviewing the real property report and letter of compliance to ensure you are satisfying the terms of your obligations under the Offer to Purchase Agreement. Any changes to the exterior of the property will require an updated or new real property report which then needs to be submitted to the municipality for compliance. We will assist and advise on the validity of the existing real property report and if a new real property report needs to be ordered, this should be done well in advance of closing to allow for any additional permits that may be required before closing.
• We will work through all property tax adjustments and help you understand the process of selling a home and paying out the mortgage.
• If we review the Offer to Purchase Agreement before you’ve signed, then we will help you to make sure the Offer to Purchase Agreement refers to the chattels that are included or excluded (chattels refers to appliances, drapes, light fixtures etc).
• If you do not have a current Real Property Report and wish to offer your buyer title insurance, make sure the appropriate paragraphs in the Offer to Purchase Agreement are amended to reflect that fact.
• Be sure of the amount of commission payable to the real estate agent. The commission is always payable to the realtor on the day of closing. The amount of the commission should be set out in the Listing Agreement signed by you at the time you hire the realtor. Make sure you understand how the real estate commission has been calculated so that there are no surprises on the day of closing.
OTHER GENERAL INFORMATION
1. Disclosure by the Seller - Note that while the seller is obligated to provide certain disclosures, this obligation is limited. Basically, the seller is only obligated to disclose any hidden (or as we lawyers like to call it “latent”) defects of which they are aware. These would be defects that you, as the buyer, could not discover through an ordinary inspection. So, a gauge in the hardwood flooring, under the area rug, is not a hidden defect as that is something you could have discovered had you moved the area rug.
Yes, it sounds crazy that you’d have to move an area rug or move furniture to see what condition the floor is in, but if you want to avoid a surprise when you move in and you want some compensation for the damage, it is much better to discover it at the time you are deciding on making an offer rather than the day you move in. Something that is “hidden” in nature would be blocked sewer lines or cracks in the foundation that may be hidden behind basement walls. There is no obligation to disclose defects or deficiencies that are visible and simply not noticed by you. Also, a seller is not obligated to disclose building code deficiencies nor is there an obligation for the seller to remedy building code deficiencies. This is where having a really good home inspector comes in.
2. When do I get my Sale Proceeds? Lawyers acting for the seller typically receive the cash to close just before noon on the completion date. The lawyer will ensure all mortgages, lines of credit, real estate commission and legal fees are paid on the same day. The money left over (net sale proceeds) will be distributed to the seller on the same day as well. At HART LAW OFFICE we take pride in ensuring the seller receives his/her sale proceeds on the date of closing. The net sale proceeds can be sent directly to your bank by our office or by courier or you can attend our office on the day of closing to pick up your funds.