For Buyers
A HOME BUYER’S GUIDE:
GETTING THE MOST OUT OF YOUR LAWYER
Buying a home is an exciting experience, but there are so many things to be done that it can feel a little overwhelming, especially if this is your first home. Working with the right team of professionals will ease your stress and ensure that the process runs as smoothly as possible. While most people understand the role that a real estate agent, bank or mortgage broker, or insurance agent play in buying a home, very few people fully understand what a lawyer does in the process.
PROTECTING YOUR INTERESTS:
Your lawyer is here to protect your legal rights and interests in the buying process and one of the most important things we do is perform the title search.
A title search will help determine the following:
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- Legal owners of the property: We want to make sure that the people who sold you the property have the legal right to transfer the property to you.
- Registered Easements or Rights-of-Way: These are the rights of other people or corporations— such as utility companies—to enter onto or access your property.
- Liens: We determine whether there are any liens registered against the property and if so, we make sure that they are removed before the property is transferred to you.
- Mortgages: We identify any mortgages or lines of credit that are registered on the property and make sure that these are paid out and removed from the title so that they do not affect your interest in the property.
Your lawyer is also responsible for verifying the legal description of the property and comparing what is found in the title search to what was disclosed to you in the Agreement of Purchase and Sale. Your lawyer will review the title search with you so that you know what’s registered against your title to the property.
Your lawyer will also prepare the documents that the sellers will sign (including their undertakings and warranties) based on your Agreement of Purchase and Sale.
FINANCING YOUR PURCHASE:
Your lawyer will calculate how much money you need to complete your purchase, including land transfer tax, registration costs, legal fees and disbursements. Most home purchases are financed through a mortgage or line of credit. Your lawyer plays an important role in the funding of your purchase. We get instructions from your mortgage company which set out their conditions for funding your purchase, such as the searches they want done, the documents they want prepared for you to sign and the terms that will be included in your mortgage. The mortgage company may also require that certain debts are paid as a condition of your financing. When we have been told by the mortgage company the exact amount of money that will be advanced, we will calculate the amount of money we require from you to cover your down-payment and closing costs.
Land Transfer Tax (LTT) is payable to the Ontario Government by the Purchaser on every purchase of property in Ontario. LTT is debited from the lawyer’s bank account on the day that property ownership is transferred. Typically, Land Transfer Tax is based on the amount paid for the land (additionally inclusive of any amount on any mortgage or debt being taken on as part of the agreement of purchase of the land).
Land Transfer Tax Calculator
Coordinating Closing:
As your closing date approaches, your lawyer is working with your mortgage company to make sure that all of their conditions are satisfied and that the money will be available for closing. On the closing day, the mortgage company will advance us the money which will be held by us in trust until we are ready to close the deal. Your lawyer will also be working with the seller’s lawyer to make sure that any title issues have been resolved before closing. Once these issues have been resolved, your lawyer will co-ordinate the payment of money to the seller’s lawyer and hold the key until the deed has been registered—at which time the key will be released to you, the new homeowner.