Buying or Selling A Home? Why Having A Real Estate Lawyer is So Important.
Calgary home buyers and sellers have various options when it comes to real estate transactions. Most people use a real estate agent. More seasoned vendors and purchasers may be comfortable trying to sell their own home using a variety of advertising methods.
However, whether you are new to the real estate process or feel like you’re an old pro, buying and selling property are typically the biggest monetary transactions people make in their personal lives. And that’s why it’s absolutely critical to have an experienced real estate lawyer keep a close eye on each step of the process.
It’s important to recognize that very few real estate transactions are identical. Buying that three bedroom bungalow may seem like a simple deal but, far more often than not, “little” issues begin to pop up that may cause huge problems later – and may cost the buyer or seller far more money than the comparatively small fee of a legal real estate professional. It’s also important to note that most financial institutions will insist on the use of a lawyer, or they won’t participate in the transaction.
Below, we summarize some of the many reasons having a real estate lawyer is vital to a smooth property transfer.
BUYING A HOME
Check the title: It may seem so obvious that you don’t even think about it, but before you give someone money in exchange for their home, you want to make sure they actually own the property. Sadly, people have lost significant sums of money when they think they have bought a home and are met by the real property owner (who is usually the landlord of the person who claimed they owned the house) after the money has been paid and the fake seller is long gone. To prevent this, your lawyer will search the title to make sure the people selling it really are the owners. Your lawyer will also ensure that all debts registered against the home are discharged so that you have clear title.
Conditions, conditions: Possibly the biggest reason each real estate deal has unique aspects are the conditions a buyer (and, sometimes the seller) can attach to an offer to purchase. Some common conditions include the approval of a mortgage or the sale of the purchaser’s previous home. It’s also wise to impose conditions based on verifying the home’s value through an appraisal. A home inspection is another common condition that will also provide peace of mind and verify a home’s condition is represented fairly.
Obtain a Real Property Report: Often referred to as an RPR, a Real Property Report is a standard clause in offers prepared by real estate professionals. However, even if you use a realtor, you’ll want to make sure the request for an RPR is in your purchase contract and hasn’t been deleted. Essentially, it’s a drawing prepared by a surveyor that shows where the property lines are and where buildings, fences and any additions are located in relation to those property lines. Just like those coloring books you may have played with as a child, it’s important to make sure everything stays within the property lines.
HOAs, Encumbrances, Taxes and more: There may be other fees you need to consider in addition to the list price of your home. Your lawyer will check to make sure those fees are paid up to the date of your purchase. Condominiums almost always belong to a Home Owners Association (HOA). Monthly fees are collected to fund the maintenance of the common properties within the condo development. If you are purchasing in one of Calgary’s popular lake communities, there will be an encumbrance on your home’s title that gives the Residents Association, the organization that maintains the lake and surrounding parkland, the assurance that their fees will be paid. All of these fees are not charged to the homeowner, but to the property itself. If the fees are unpaid, the new owner will be responsible. Likewise, the City of Calgary collects taxes on a monthly or annual basis from home owners. Discovering these costs are overdue can result in major fees and penalties.
SELLING YOUR HOME
Have Your Lawyer Review the Offer: Sellers may be anxious to accept an offer, especially if the sale of a home is urgent due to job relocations or other pending issues. However, overlooking critical details and conditions in the purchase offer can be devastating. It’s important your lawyer reviews the offer to purchase, so much so that you can set a condition of sale that requires your lawyer’s approval. Our law office reviews Offers to Purchase as a part of the service provided for the overall transaction, so there is no additional cost to the seller (or buyer, as the case may be).
Prepare to Close: Especially if you choose not to use an agent, most sellers don’t know how to prepare documentation to close the deal. A lawyer can draft an offer to close for you, helping to ensure the transaction will proceed smoothly.
Show Me The Money: Are you prepared to accept a personal cheque for the purchase of your home? Or a briefcase full of cash? Obviously, the seller wants to know the funds will arrive in a secure manner prior to handing over title to their home. Through the use of a trust account, lawyers protect sellers from having title to their property being stolen. (Likewise, a purchaser also wants to know their funds are handled appropriately.)
Only Pay For What You Use: Taxes, HOA fees and other encumbrances on a property are typically collected on a monthly or annual basis. A lawyer will adjust these payments and return any money owing to the seller based on funds that have been paid in advance. This can return a significant amount of money into your pocket.
Mullen and Company has decades of experience in the buying and selling of many different real estate properties. We know what to look for and we catch those little details that could cause you major problems after you think the deal is done. If you’re ready to buy or sell, let your agent know you want to work with Mullen and Company or give us a call directly at 403-271-9710