Why You Need A Lawyer
Get familiar with legal aspects of the transaction. You'll have a better understanding of what happens and will be able to discuss problems with a lawyer. Knowing what lawyers do helps to make sure that nothing is neglected.
What Your Lawyer Should Do
Agreement Of Purchase And Sale - A lawyer has to review the agreement and approve all changes made during negotiations. Get your lawyer involved as soon as possible, so you'll have enough time to cope with problems if they arise.
Property Title Search - Records at a local land registry will be examined to verify that the sellers are legal owners, and whether there're any claims (liens), or property restrictions (covenants) registered on the title.
This search also aims to discover other title handicaps like easements, rights-of-way, and encroachments.
Municipal Search - Then the lawyer should send a copy of the survey to the local municipality along with a letter asking to verify the property compliance with zoning by-laws and building codes.
This search will reveal whether the property features meet the standards mandated by the municipality.
Other details you can learn about include information on the occupancy permit, outstanding work orders, completion requirements, and how the property conforms to subdivision agreements.
Executions Search - has to ensure there are no executions against the seller (or prior owners). A writ of execution is a court order permitting a creditor to seize and sell the property of a debtor to recover a debt.
Land Transfer Tax, GST/HST - The lawyer will calculate the amount of the land transfer tax, and advise first-time home buyers on refund proceedings, if refunds are available in their province.
If you buy a new home he or she will also determine whether GST/HST rebate should be assigned to a builder.
Utilities And Property Tax Search - The lawyer will contact utility companies to confirm the balance of payments. A similar request regarding the property tax is to be sent to the municipality.
Outstanding balances have to be paid by previous owners before a closing day. If anything is paid beyond the closing a refund from the buyer should be passed to the seller.
Title Opinion - Survey analysis and property searches can expose title defects before it's too late. When problems are found sellers and buyers can work with their lawyers to get rid of them.
If they can't be removed your lawyer will advise you about the risk, so you can decide whether to proceed with the transaction or to walk out.
Title Insurance - If you decide not to survey the property and to buy title insurance your lawyer's opinion on the title isn't necessary. However, you'll still need a legal assistance with closing. Policies vary across insurance companies, and coverage detailes should be discussed with the lawyer.
Mortgage Agreement - The lawyer has to ensure that you satisfied all requirements for the appraisal, survey or title insurance, home insurance and (if it applies to you) mortgage insurance.
You'll be advised on expenses associated with the mortgage. They're deducted from the total amount and you have to make up the difference with your own money.
The lawyer will prepare mortgage documents and send them to the financial institution for approval prior to closing.
Taking the Title - The lawyer can help you determine how you can assume the ownership of the property. Married couples usually buy a house as joint tenants. When one spouse dies, the property is passed onto the other.
Some homebuyers choose a sole ownership, if they are single or a spouse doesn't qualify for a mortgage. Others prefer holding the title as tenants-in-common, so they can pass their interest in the property as stated in a will.
Transfer of Title - Shortly before closing you'll have to provide the final balance of payments, including the legal bill for services and disbursements, the rest of your down payment, applicable fees, taxes and adjustmests.
The mortgage and the money received from you will be deposited in your lawyer's trust account, and the lawyer will certify cheques for closing. On the closing day your lawyer will search the title again and perform another execution search.
After the title of the property has been transfered to you and your mortgage registered on it, your lawyer will pass to the vendor's lawyer the total payment for the house and you can pick up your keys. Few days after the closing you will receive your lawyer's report containing transaction description and all documents.
How To Hire A Lawyer
Lawyer's Experience - Don't take any chances with beginners or someone who doesn't specialize in real estate. Choose only an accomplished professional practising for a long time. Ask about credentials, years of experience and the type of real estate mostly dealt with.
Legal Fee - Don't shop for a lowest fee. If you think about savings you should also consider how much you can loose when something goes wrong. Experienced lawyers charge more but they will give you peace of mind and security.
Services And Cost - Ask what particular services will be delivered and at what cost, including all fees and disbursements. If you hire a lawyer offering fixed closing price ask whether you will have to pick any extra cost.
Finding A Lawyer - Start your search from a social circle of trusted individuals whose opinion you value. Your bank is a good point of reference too. They're genuinely interested that you buy a house with a good title.
Get in touch with the Lawyer Referral Service, available in most provinces. These services are run by local legal associations, and they can help you find lawyers working in your area.
Contact a title insurance company which offers closing services. The insurer can get you a lawyer who will purchase your title policy and complete the closing at a fixed price.