Buying a home is a thrilling experience. You search for a home through websites or by the help of your real estate agent. Once you have located your dream home, you make an offer to the seller. Once they accept your offer, an agreement of purchase and sale is drafted and signed by you as well as your seller. A down payment is also made by the buyer at that point. Buyer’s lawyer or their agent or seller’s lawyer holds onto it until closing. After that you are only one step away from becoming the registered owner of the property. The last step is the real estate closing. By keeping the following information in your mind you can have a smooth and efficient closing.
Your real estate lawyer conducts a title search on the subject property. A title search involves the examination of public records and other documentation to ensure that a property is good to be sold and its title is free of any claims, liens, or other issues that could prevent you from legally owning the property. Date of title search is mentioned on the agreement of purchase and sale. Your real estate lawyer has to conduct the title search before the requisitions date for it to have any worth.
If there are any defects in the title, your lawyer will requisition them. After carefully examining the title your lawyer prepares a letter of requisitions and forwards it to the seller’s lawyer. The most common issues with the title that are added in the requisitions are registered charge(s), restrictions on the land, liens, judgments and work orders. It is the responsibility of the seller and their real estate lawyer to resolve these issues and provide a clean title on closing.
Title insurance protects you and your lender from financial loss sustained from defects on title to a property. Major defects in the property are liens, encumbrances, easements and right of way. Your real estate lawyer orders the title insurance policy for both you and your lender. Premium for title insurance policy is paid by the buyer.
When buyers go to lenders they assess their financial condition by examining some factors such as credit score, income and employment history, debt-to-income ratio, down payment and liquid assets. Once you qualify your lender instructs your mortgage to your lawyer. Your lawyer then reviews the documents and explains them to you. After you sign the documents these documents are submitted to your lender.
Once your lender has received a signed copy of the documents and all conditions are satisfied, they will transfer funds into your lawyer’s trust account. Your lawyer then uses these funds to complete the purchase of your house.
Real Estate transactions in Ontario are usually dependent upon one or more conditions, one of which is commonly a home inspection condition. A home inspection condition gives you the right to schedule a home inspection prior to close as a condition of the purchase agreement. You can also use it to potentially negotiate a lower price or have repairs completed based on the findings. Moreover, if the buyer finds serious issues with the property, they can walk away from the agreement of purchase and sale.
Statement of Adjustments allows both the Buyer and the Seller to see how property taxes, condo fees, deposits and other items are used to determine the actual amount that the Buyer owes the Seller to complete the purchase. Seller’s lawyer prepares the statement of adjustments and then forwards it to buyer’s solicitor. Your lawyer deposits the funds according to the statement of adjustments into seller’s lawyer account to complete the purchase.
Your lawyer prepares a set of documents prior to the close. You will need to sign them in the presence of your lawyer. Signed copies of the following documents have to be submitted to seller’s lawyer before the close.
Seller’s lawyer prepares the transfer instrument on Teraview. PIN is provided to them by your solicitor when they conduct the title search. Seller’s lawyer adds that PIN into the instrument and completes the information related to the seller. Once the seller’s lawyer messages the instrument to buyer’s lawyer they complete the statements and information related to buyers.
Seller’s lawyer will also forward documents to your lawyer. These documents are signed by the seller. Your lawyer will review them and then transfer funds to your seller’s lawyer. On successful receipt of funds seller’s lawyer will release their client from the title. Once released, your lawyer can register you on title.
Assistant Manager, Real EstateTreadstone Associates