Real Estate

For Buyers

The process of buying or selling a home, particularly a first home, can be confusing and overwhelming.  Set out below is an overview of the typical steps in the purchase of a new home.

The Agreement of Purchase and Sale

If you are working with a real estate agent, your agent will assist you to prepare the offer for the purchase. Occasionally the offer will be conditional on review by the lawyer. If that is the case, and you have selected Alison as your lawyer, the agent will send the paperwork to our office and we will review the offer and contact you to discuss it. You are required to advise your real estate agent if you are satisfied with the review and prepared to waive that condition.

Once the offer has firmed up, the real estate agent will send the paperwork to our office where we will open your file. You will then be contacted by either Rachel, Pat, or Darlene.

How to Hold Title to the Property

If there is more than one owner of a property, we will need to know how you would like to hold title. There are two ways to hold title to a property with another person: as joint tenants, or as tenants in common. If you are joint tenants, when one of you dies, the survivor becomes the owner of the property outright. The death of the first joint tenant extinguishes his or her right to the property and full ownership passes to the surviving joint tenant. This happens regardless of what is written in the deceased owner’s will.

If you hold title to the property as tenants in common, each of the co-owners owns a particular share of the property (it could be 50/50 or any combination you choose). If one of the co-owners dies, his or her share does not pass directly to the surviving owner, but rather to the beneficiaries named in the deceased owner’s will.

Each scenario is unique, and sometimes there are more than two owners going on title. We will be happy to discuss with you the various options for holding title and the advantages and disadvantages of each.

Financing

In addition to how you wish to hold title, we will need to know if you are getting a mortgage for the property and if so, who the lender is. We need this information as early as possible so that we can communicate with the lender and get the paperwork in place.

Title Insurance

At Lester and Associates we obtain title insurance on all purchases. Clients often have questions about how title insurance works. As a purchaser of real estate, you retain Alison to conduct a “title search” of the lands that you are buying. On the closing of the transaction, Alison will provide you with her certification that you will be the registered owners of the land, and that other than the mortgage holder no one else has an interest in the property. This certification includes confirmation that there are no outstanding taxes, no municipal work orders, no liens, judgments or executions filed against any previous owner, etc. which would negatively affect the title to your property.

Title insurance is an insurance policy that supplements a certification of title. If you have purchased the insurance and there is a problem with your title that Alison did not or could not identify, the insurance company will either assist in the rectification of that problem or, in significant cases, would pay out sufficient funds to clear the title or pay you for any loss you might incur.

Setting up utilities

You are responsible for contacting the local utility companies to set up an account at your new home.

On or before the day that you sign the closing paperwork, you will receive a Funds Summary which sets out the amount of money we require from you in order to close the transaction. If you are not getting a mortgage, this amount includes the balance due on closing (the purchase price of the house less any deposit paid and adjustments made) plus our legal fee and the land transfer tax. If you are getting a mortgage, this amount includes the “down payment” plus our legal fee and the land transfer tax.

On the day of closing

On the day of closing, the mortgage money will be directly deposited into the lawyer’s trust account. Using this money, along with the funds we have received from you, we will pay the seller’s lawyer. Typically, house keys are left in a lockbox on the property. Once the transaction has closed, you will get a telephone call from us to let you know the code to the lockbox. Unfortunately, we cannot guarantee at what time the keys will be available as it depends on a number of factors. Please keep this in consideration when you are planning your move.

Land Transfer Tax

In Ontario, you are required to pay land transfer tax when you purchase property. As of January 1, 2017, the tax rates on the value of the consideration are as follows:

• Amounts up to and including $55,000: 0.5%
• Amounts exceeding $55,000, up to and including $250,000: 1.0%
• Amounts exceeding $250,000, up to and including $400,000: 1.5%
• Amounts exceeding $400,000: 2%
• Amounts exceeding $2,000,000, were the land contains one or two single family residences: 2.5%.

If you are a first-time home buyer, there is a rebate on the land transfer tax. As of January 1, 2017, the maximum amount of the refund is $4,000. This means that no land transfer tax would be payable by qualifying first-time purchasers on the first $368,000 of the value of the consideration for eligible homes. First-time purchasers of homes greater than $368,000 would receive a maximum refund of $4,000.

Please do not hesitate to speak to us if you think you might qualify for the first-time home buyer’s rebate.

In addition to the land transfer tax, a Non-Resident Speculation Tax of 25% of the purchase price of a home applies on the purchase or acquisition of an interest in real property anywhere in the province of Ontario by individuals who are foreign nationals (individuals who are not Canadian citizens or permanent residents of Canada) or by foreign corporations or taxable trustees. Please advise us as soon as possible if you think the Non-Resident Speculation Tax applies to you.

For Sellers

Once you have a firm sale of your property, your real estate agent will send the paperwork to our office. Either Rachel, Pat, or Darlene will contact you to let you know the next steps. Generally speaking, we will require proof of payment of property taxes, a copy of your mortgage statement, if the property is subject to a mortgage or secured line of credit, and a void cheque providing us with your banking details.

A couple of days before closing, you will meet with Alison to sign the closing paperwork. On the day of closing, we will wire the funds to your bank account. It typically takes twenty-four hours for the funds to hit your account.

You are responsible for cancelling all utilities at the property.