When someone decides to sell their house they usually reach out to a realtor. Some sellers do not use a real estate agent and instead they list their house on MLS directory. Once they have a firm offer from a buyer, a contract called agreement of purchase and sale (APS) is drafted.
The agreement of purchase and sale is signed by the buyer and the seller once both parties have agreed to terms. A deposit is submitted by the buyer. Buyer can deposit that sum into the account of seller’s lawyer or seller’s agent or buyer’s agent. Seller reaches out to their lawyer with the APS and their real estate law firm starts working on it.
Their law firm will request documents from the seller and start working on their file. Lawyer request their IDs for identity verification at the time of signing. Their property tax bill and condo fee invoice are usually requested to prepare the statement of adjustments. Law firms also inquire about seller’s Family Law Act statement to prepare the transfer on the government registry. Family Law Act statement is also needed to confirm if a spousal consent is needed.
The Statement of Adjustments is a document that 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.
Statement of Adjustments is prepared by the seller’s lawyer. Seller’s lawyer forwards that to buyer’s lawyer. Funds are deposited as per the statement of adjustments and letter of requisitions.
Title search is conducted by buyer’s real estate lawyer on the subject property. They have to perform it before the date mentioned on the agreement of purchase and sale. A title search is used for many purposes, as it includes the names of the property owner(s), restrictions on the land, mortgage details, lease details and other relevant information associated with the property.
If there are any deficiencies in the title of the property, buyer’s solicitor can requisition them. They prepare a letter of requisitions and forward it to the seller’s real estate lawyer.
Requisitions are reviewed by seller’s solicitor and then they submit their response to buyer’s solicitor. Requisitions can be denied if they are received after the requisition date. In the response, seller’s lawyer advises the buyer’s lawyer that they will do the needful to provide a clean title on closing. Seller’s lawyer also reaches out to the concerned parties to remove the deficiencies prior to the closing.
If there is a charge registered on the property, it needs to be paid out completely in order to provide a clean title to the buyer. Seller’s lawyer reaches out to the lender and requests a payout statement for discharge purposes. Seller’s lawyer undertakes to pay off and discharge the mortgage from the title.
Signing documents are prepared by seller’s lawyer. The seller’s signatures are required on the following documents in Ontario:
The above mentioned documents are signed by the seller and witnessed by their real estate lawyer.
The Teraview website is used to access data in the Government of Ontario’s land records database, and is used by lawyers, paralegals, title searchers, search houses, title insurers, financial institutions and the government. You can perform searches, create and submit title documents for registration.
A transfer instrument is created in the docket of the particular transaction. PIN is added as per the title search conducted by the buyer’s lawyer. Seller’s lawyer adds all the information related to their client, fills out the transfer and messages it to the buyer’s solicitor.
Documents signed by the seller are forwarded to the buyer’s solicitor. Documents are reviewed and verified by the Buyer’s solicitor. After that they deposit the funds into the trust account of seller’s lawyer. They provide seller’s lawyer with the proof of funds along with their closing documents signed by the buyer.
On successful receipt of funds, seller is released from the title by their real estate lawyer. Once released, buyer’s lawyer registers their client on the title of the property. Seller’s lawyer pays off the existing mortgage(s) on the title from the sale proceeds. If a realtor is involved, their commission is also paid from the sale proceeds. Lawyer deducts their legal fees and after all the other expenses the remaining funds are released to the seller.
Assistant Manager, Real EstateTreadstone Associates