For Home Buyers
[ Your Lawyer's Role | Checklist | An Interview with an Insurance Adjuster | Condo | Glossary of Terms | Land Transfer Tax ]
Get a TitlePLUS lawyer right away and â€¦
|1. Don't get stuck signing a poor agreement|
|Not all real estate agreements are created equal. Once you have found your dream home, your real estate agent will probably ask you to sign a standard form agreement of purchase and sale. Although these types of agreements are usually comprehensive, they may not give you all the protection you need. See a TitlePLUS lawyer before you sign to ensure that the standard form agreement is properly customized to meet your unique needs.|
|EXAMPLE: Perhaps your dream home has a large backyard where you plan to build the swimming pool that you have always wanted. The problem is that zoning restrictions or an easement may prevent you from building the pool at all. Your TitlePLUS lawyer can ensure that the agreement allows you to walk away from the deal if you cannot build the pool. The standard form agreement may leave you forced to purchase the house that is no longer your dream home!|
|2. Save money!|
|Your TitlePLUS lawyer can tell you how the prudent use of title insurance can save you money on the cost of certain legal searches that may not be required.|
|EXAMPLE: You can usually avoid the need for an up-to-date survey of the property if you are purchasing title insurance. This alone can save you hundreds of dollars!|
|3. Discover when you should spend your money|
|Everyone wants to save money, but sometimes the right choice is to spend your money. You may be able to save the cost of certain searches or an up-to-date survey, but see your TitlePLUS lawyer to find out when your circumstances mean that you should pay for a search/survey even if you are not required to have one.|
|EXAMPLE: Your decision to save the money on the cost of a search/survey today may prove very costly down the line. If you are planning to alter the property (for example, by building an addition on the house), it is much more important that you have a survey and that your lawyer performs a zoning search. A review by your lawyer of the survey and zoning search/by-laws is the only way that you will know if you can build precisely what you want on the land.|
|4. Avoid nasty surprises|
|Houses are expensive. The last thing that you need is to learn about a significant expense only a few days before closing. See your TitlePLUS lawyer to learn the full cost of purchasing your home.|
|EXAMPLE: Provincial governments generally levy a tax on the transfer of land. In Ontario, Land Transfer Tax is calculated on a sliding scale varying with the value of the property. On a $250,000 resale house, you would be required to pay $2,225 in tax.|
|5. Learn the best way for you to "hold title"|
|If you are buying your house with someone else, which person's name should go on title? (In other words, who should be registered as the owner?) You, the other person or both of you? It is not as straightforward a question as it might seem. Also, if you put title to the property in more than one person's name, should you hold title as "joint tenants" or as "tenants in common"? The answers to these questions are very important. They will affect what happens to the property if one of you dies. To answer them fully in your circumstances, you and your lawyer might consider issues related to bankruptcy law, family law, estates law and other areas. Your TitlePLUS lawyer can help guide you so that you can make the best possible decision.|
|EXAMPLE: If you are buying your house with your spouse, it is common to have both of your names go on title as "joint tenants". This means that if one of you dies, the other automatically becomes the sole owner of the property.|
|6. Ensure that you will be protected from fraud|
|When you buy a home using the services of a TitlePLUS lawyer, you will benefit from solid protection from fraud under the TitlePLUS policy.|
|EXAMPLE: Without your knowledge, it is possible for a fraudster to transfer title of your home into his/her name. Once done, the fraudster could potentially borrow a substantial sum of money from a lender on the security of a new mortgage on your home! The TitlePLUS policy will compensate you if you suffer a loss because someone (e.g., a lender) claims such an interest in your property. Please refer to the TitlePLUS policy for full details, including actual terms and conditions.|
|7. Actually understand what you are signing|
|How many times have you been handed a document to sign and not really understood what it is you are signing? A real estate transaction is just too important for you to be signing documents without understanding them. Your TitlePLUS lawyer can explain to you the purpose of all the documents that you are being asked to sign.|
|EXAMPLE: Your mortgage documents are particularly important and your TitlePLUS lawyer can ensure that you understand the terms, such as when and how you can prepay some or all of your mortgage balance.|
And on the topic of Closing Costs...
To estimate closing costs, add the following:
- The purchase price less any deposit paid and available mortgage funds;
- Your share of any costs that the vendor has prepaid. This could include municipal property taxes, maintenance fees on a condominium unit, heating oil already in the tank, any flat-rate water account, etc;
- Land Transfer Tax (LTT), which is calculated on a sliding scale based upon the value of the property:
| ||$100,000 property = $725 LTT|
$200,000 property = $1,725 LTT
$300,000 property = $2,975 LTT
$500,000 property = $6,475 LTT
- Legal fees: Depending on the location and type of property, the average minimum range is between $500 and $1,000 (plus GST) for a purchase with one mortgage. For additional information on suggested legal fees, visit www.lawyersworkinggroup.com;
- Disbursements, including search fees, document registration fees, title insurance, etc. (not including a survey). The average range is between $500 and $700 (plus GST for most disbursements), although disbursement costs can vary due to the type of transaction and your individual needs/requirements;
- New survey, if required: Average cost between $800 and $1,000 for an urban subdivision property.
For more information about your lawyer's role...
Click "Working with a Lawyer when you Buy a Home"
This full-colour booklet:
- is an educational tool for clients who are commencing a real estate transaction;
- explains in "lay person" terms, all the legal aspects of the purchase of a residential property and the role of the lawyer to protect a client's home; and
- outlines the options available (solicitor's opinion on title, title insurance, or TitlePLUS insurance).
Please contact us if you would like a copy of this Brochure in French.
© 2017 Lawyers' Professional Indemnity Company (LAWPRO®)
Underwritten by Lawyers' Professional Indemnity Company. Contact us for brokers in Manitoba, Alberta and Québec.
Lawyers’ Professional Indemnity Company, 250 Yonge Street, Suite 3101, P.O. Box 3, Toronto, ON M5B 2L7, 1-800-410-1013