Ahlstrom Wright Answers: Do I Really Need a Real Estate Lawyer?
The short answer is you don’t; however, there are many benefits to using a lawyer throughout your home buying or selling process. Specifically, the legal aspects of the transaction can be extensive, and lawyers know what steps to take to protect you and your interests. Your lawyer will order a copy of the title to the property and check it for any restrictions, such as easements, restrictive covenants, and encumbrances as well as ensure that you have a clear title to the property.
Your lawyer’s role in your real estate transaction is also to review documentation from the other lawyer to ensure your rights are protected and that the documentation reflects the terms in the Agreement of Purchase and Sale, as well as any conditions that may be unique to your circumstances. Your lawyer will exchange closing documentation with the other lawyer, obtain funds and pay outstanding amounts including encumbrances on title and real estate commission, and provide net proceeds to you in a manner that protects your interests. Because your lawyer has
trust accounts, the funds to purchase your new property can be deposited and safely preserved until needed, and your lawyer can enforce certain conditions necessary to preserve your rights even as those funds are transferred in payment.
How Much is the Legal Process Going to Cost?
Before you agree on the price of your new home, you need to be aware of the other costs of finishing the transaction. Your lawyer can explain how each of these components works and why they are necessary.
These costs include:
- Legal Fees
- These are fees for your lawyer’s services
- Below are a list of Ahlstrom Wright’s standard fees (excluding complexities)
- Property Sale ($650.00)
- Purchase with existing mortgage or cash ($650.00)
- Purchase with new mortgage ($775.00)
- Mortgage re-financing ($700.00)
- Additional expenses required to complete your transaction
- i.e. document registration, land title searches, courier fees
- Property Tax Adjustments
- Oftentimes a portion of the annual property taxes will already be paid by the seller and must be rectified along with the transfer of the property
- This amount might be credited to the buyer if the buyer will be required to pay them
- Fire Insurance
- If you are obtaining a mortgage, residential purchases cannot be completed without proof of fire insurance
- Late Interest Charges
- In some instances the mortgage company will not advance the funds necessary to pay for your new property until the title is transferred to your name and is registered in the Land Titles Office
- This delay might result in interest charges on the money the seller is waiting to receive
- If you are purchasing a new home or agricultural land, GST will be charged on top of your purchase price
- Real Property Report
- This is a legal document which clearly illustrates the location of significant visible improvements relative to property boundaries
- If you are a seller, we advise you to obtain a RPR and Municipal Compliance Certificate in advance of listing your property
What Does your Lawyer Need to Complete the Transaction?
- Agreement of Purchase and Sale
- A copy of this should be forwarded to your lawyer
- Name of the mortgage lender
- Inspection report
- If required as a condition of your title insurance policy
- Personal photo ID with date of birth
- Required for each purchaser
- Property insurance
- Your insurance company must provide your lawyer with a certificate of insurance or a binder letter as a condition of the mortgage
- The lender requires this insurance to be active on the closing date
- Real Property Report
- If you are selling a property, bring the RPR with a letter of compliance for the property in question
- Your most recent property tax bill
- Name and address of Condominium Corporation
- Closing funds
- Sufficient funds to complete the purchase is required on or before the closing date
Buying or Selling a Home?
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