Buying and Selling a Home
PURCHASE OF PROPERTY:
What is the role of my lawyer when buying Property?
When clients meet with us, generally they care about two things:
1. Understanding the closing costs; and
2. “Where are my keys?”
Ultimately, what you have hired us to do, is get a piece of paper with your name on it, confirming that you are the owner. This is also known as your Status of Title.
In any transaction there are a number of items that we take care of for you, with the goal of completing your property purchase with as little stress as possible. With that in mind, here is a quick breakdown of the process:
When do I meet with my lawyer?
There are three items that must be taken care of before a lawyer can schedule an appointment with you:
1. A fully executed copy of the Offer to Purchase Agreement needs to be sent to your lawyer (typically done by the Real Estate Agent);
2. A client identification form needs to be completed so that we may open a file and conduct our Title Search and Tax Search; and
3. Your mortgage instructions (if any) should be provided to your lawyer seven (7) days prior to closing, to avoid a rush transaction.
Once these items are provided, your closing costs can be accurately calculated and provided to you. Note that it is common to meet with your lawyer the week of your closing, although earlier accommodations can be made if possible. You should also be prepared to schedule a meeting between normal business hours 9-11 and 1-4. Meetings outside of this time frame can be accommodated with your lawyer directly, but may come with additional costs and are often discouraged as there are fewer resources available to correct typographical errors, and it is more difficult to get in touch with other professionals (mortgage broker, insurance broker, lawyer for vendor, etc.) that may need to answer questions from time to time.
How do I know how much money to bring in to complete my Purchase?
Often, purchasers are not aware that their lawyer will collect all costs to close the transaction up front. These include:
1. Land Transfer Tax;
2. Cash to mortgage balance (remainder of down payment);
3. Registration Costs;
4. Survey/Zoning or Title Insurance Costs;
5. Tax Adjustment;
6. General expenses/disbursements, such as a Title Search, Tax Search, couriers, faxes, etc.; and
7. Legal Fees.
Our fees are competitive and are a direct reflection of what we believe is required to provide the most cost effective and best experience possible to you. It is important to note when taking all of the closing costs into consideration, there is very little variation from law firm to law firm.
What is Title Insurance and why do I need it?
It has become standard practice in Manitoba to order a Title Insurance Policy for you. In the grand scheme of your transaction, this document is a minimal expense in the Purchase of your home and is best explained in person by your lawyer.
When do I get my keys?
It is not uncommon for keys to arrive at our office the day prior to closing. Unfortunately we are not in control of when your keys arrive and therefor you should plan to pick up your keys when they become available. Sometimes we have the keys in advance of closing and in advance of our meeting with you. We always use our best efforts to confirm that we may release keys to you at our meeting. In order to do this, we require that we have all closing funds in our possession, documents signed and a copy of your insurance binder.
As indicated above, we require a “binder of insurance” confirming you have placed coverage on your home. If you have a lender, they will need to be noted as “a loss payee” on your insurance. This means, when placing your insurance you will need your lender’s information, including how they are displayed on your mortgage together with their mailing address for service. In addition, you will want to provide your insurance broker with your lawyer’s contact information, which will make it easier for them to provide your lawyer with a copy of your insurance policy.
What about Property Taxes and Adjustments Generally?
A lot of people are unaware that taxes are paid in two ways:
1. Annually in a lump sum (always due by the end of June, but covers January 1 through December 31); or
2. Monthly on the Tax Installment Payment Plan (TIPP) through the City of Winnipeg.
When you are buying a home, we always adjust for the property taxes. This means you pay for your share, and the Vendor pays for their share.
If the Vendor pays annually, then you will receive a credit from them to apply towards your total tax bill, if the closing transaction occurs prior to June. However, if closing is after June and taxes are already paid, then the Purchaser is responsible to pay their share back to the Vendor. This adjustment is calculated as part of your closing costs. Note that if closing is to occur in June, there will be cases where the taxes are already paid, or may not have been paid.
If the Vendor is on the TIPP program, then adjustments will occur for that month only, and you have will have the option to assume TIPP, or to pay out the taxes in a lump sum.
Adjustments can sometimes be confusing and our suggestion is to wait until you have met with your lawyer and allowed him or her to explain all numbers to you. Other adjustments may include Condo Fees, Rents and Utility Contracts.
I left my lawyer without any paperwork! Do I need anything?
The short answer is no.Once everything has been signed and completed, your lawyer will discuss some possession tips and tricks with you.Otherwise, we have a process that occurs behind the scenes to make sure that your file is 100% complete, which can take anywhere from 30-120 days (sometimes longer).Our goal is to send you one complete package of all relevant documents that you can review and then store for a rainy day. Most importantly, if there is a document that you require prior to receiving your report, simply call your lawyer, as more often than not, we can scan that document to you within one business day provided the document is on our file.
SALE OF PROPERTY:
What is a normal sale transaction?
When selling a property, you are hiring your lawyer to remove you from the Title of the property being sold.
Although this task may seem simple, your lawyer is also in charge of making sure the following items are dealt with:
1. Collecting a key for access to the Property;
2. Obtaining your final water meter reading;
3. Paying out your Mortgage (if any) and any other non-permitted encumbrances on Title such as, personal loans secured against the Property, liens, caveats, judgements, etc. and ensuring all registrations are properly removed from the Title;
4. Paying real estate commissions (if any);
5. Tax adjustment and attending to payment of property taxes if applicable; and
6. Accounting for legal fees and disbursements.
*In certain circumstances there may be additional items that need to be attended to, which would be discussed between you and your lawyer throughout the course of your file.
When do I need to meet with my lawyer?
It is not uncommon to meet with your lawyer in the days leading up to your possession date. However if you require a meeting well in advance, simply call your lawyer to schedule an appointment at your convenience.
What do I need to bring to the meeting with my lawyer?
1. A valid Government issue Photo ID to be photocopied at our reception area (Driver’s License, Passport, etc.)
2. All keys relevant for gaining access to the Property. All other keys, mail keys, garage door openers etc., can be left on the kitchen counter when you leave the Property;
3. Take a picture of your water meter or bring the current meter reading to your meeting;
4. A copy of a recent mortgage statement and any other documents that may pertain to loans being paid out on your behalf;
5. Void Cheque of the account you wish for us to direct deposit your net sale proceeds to your account; and
6. A list of questions that you may have for your lawyer, that you can go over at the end of the meeting to ensure all your questions have been answered.
When do I get money?
Typically all closing money is provided by a Purchaser within 5-10 business days of closing. For every day that money is delayed in arriving at our office, you would receive interest from the purchaser as compensation for the delay. Once all funds are received by our office and assuming all payouts required to be completed are received by our office, we would then attend to all payouts and provide you with the balance of funds. It is important to note that we are not in control of when the money is received. We do our very best to have all funds in your hands within 2-3 business days from receiving all money.
When does my Mortgage get paid?
Your mortgage will not be paid until we have all money from the purchaser. This means, it is possible that a regular scheduled mortgage payment may be debited from your account, even though you have moved out of the property. Do not panic, as any payout statement we request will account for any and all payments that you have made. If your next mortgage payment is debited from your account, your net sale proceeds will be a larger amount, as we will payout less on your mortgage. This can be somewhat confusing, and should be raised with your lawyer during the meeting should you have questions.