The following is not legal advice and is for informational purposes only
Whether you are buying or selling a home, there are plenty of decisions to make. It can be a very stressful time, involving the help of a host of professionals, including real estate agents, financial institutions, mortgage brokers, insurance brokers, home inspectors, stagers, contractors and lawyers. The whole process can be confusing and overwhelming. When you are either making or accepting an offer on a property, things happen quickly. One way that we can help you is to review your Agreement of Purchase and Sale before it is finalized.
You can ask your real estate agent to include a condition that allows your lawyer to review the Agreement. This allows your lawyer to isolate any pitfalls or areas of concern, which might include clarifying the fixtures and chattels that are intended to remain with the house or reviewing any clauses involving warranties or a hold back for renovations. If you wish to have your Agreement reviewed prior to removing your conditions, please send it to me for review today at no extra cost.
Once all conditions have been met, the deal is ‘firm.’ From that point on, both parties are legally committed to the transaction and there are serious potential consequences to either party not wishing to fulfill their obligations. Your real estate agent will likely ask you who your lawyer is and once the lawyer receives a copy of the agreement, he or she is retained to complete the transaction for you. Your lawyer will contact you to let you know what your responsibilities are in advance of closing.
The lawyer is responsible for the legal aspects of the transaction. On a purchase, that means preparation of a mortgage (if applicable), reviewing the title search for any boundary or ownership issues, obtaining title insurance and preparing the balance of the purchase documents. On a sale, the lawyer determines what instruments are registered against your property (like a mortgage or lien), arranges for the discharge of all mortgages and lines of credit and prepare all necessary sale documents.
Usually during the week of closing, you will attend the lawyer’s office to sign all documents. At the signing appointment, the closing procedure is confirmed. On a purchase, mortgage monies are advanced to the lawyer’s trust account, which can happen anytime from early morning to late afternoon. Once funds are received, the lawyers exchange documents and funds and ultimately, the transaction is registered online. The deal is then ‘closed’ and you are contacted to come and pick up the keys. On a sale, the seller’s lawyer receives funds from the purchaser and then the transaction follows the same steps as on a purchase. Once the deal is closed and all necessary payments are made (mortgage, real estate commission, etc.) the net proceeds are made payable to you. It is impossible to predict the timing of any given closing, but it is most common for transactions to be completed in the afternoon and during peak periods, it can be as late as 5:00 pm.
If you intend to buy and sell on the same day, the house you are selling must first close in order for the funds to be available for your purchase. That means that there is a period of time after the completion of your sale when you do not have the keys to your new house. You may be waiting with a moving truck with no place to go until the purchase closes. There is also the risk that if the purchase transaction is extended to the following day for any reason, you will need to find alternate accommodations. The other option available to you is what is called “bridge financing.” It is a service offered by mortgage companies that allows you to borrow the funds you need to buy your new home from the proceeds of the sale of your property, in advance of the sale. If you choose to ‘bridge,’ you can move in to your new house before the closing date of your sale, which eliminates the pressure of a same day move.
If you are buying, selling, re-mortgaging or have other real estate needs, contact me today for a free, no obligation appointment.