There are many aspects of a real estate transaction that may seem overwhelming, especially when it is your first home purchase. The transaction is likely the largest investment you have ever made. In order to ensure that the transaction goes as smoothly as possible, an experienced real estate lawyer at Merovitz Potechin can help. Our real estate lawyers in Ottawa can review the legal agreements, provide legal advice, answer questions, inform you of government incentives, protect your interests and close the transaction.
Review the Legal Agreements, Provide Legal Advice and Answer Questions
Our real estate lawyers in Ottawa can review an agreement for purchase and sale before you sign it. We will inform you of the risks of the agreement if any exist. A home inspection is always recommended to ensure that there are no major issues requiring costly repairs, such as defects related to plumbing, mould or the foundation. You may also need a financing condition to ensure you are able to obtain sufficient funds to pay for the property. The purchase price of a home is not the only expense you will need to prepare for. For a review of the closing costs associated with home purchasing, please review our previous blog post: Buying a New Home? Here's a Primer on Closing Costs.
A review of the purchase and sale agreement is especially important when you are buying from a builder as the terms will favour the builder and you may not agree with all of those terms. For example, you may not be willing to live in the home while some parts are still being completed or you may not want to have a delayed closing. Your lawyer can advise you about any reasonable terms you can seek to include that would benefit you.
It is critical to have a lawyer review the condominium documents if you are buying a condominium unit. The status certificate and condo regulations should be examined to ensure you understand the rules and regulations of the condo and its structure and other general provisions. An accountant may be necessary to assess whether the condominium is financially healthy, and our lawyers will be happy to forward the financial documents to you or your accountant for such a review. The real estate lawyers look for potential legal issues and will report to you of any they find. If you have specific concerns, it is important to ask your real estate lawyer and the real estate lawyer can then determine how the condo documents address those concerns (e.g. Provisions related to pets). Without such a review there could be costs (e.g., expenses to rebuild the reserve fund) or terms that you commit to that you are unaware of and disagree with.
If the purchase entails a resale home, you should know which chattels are included (e.g., appliances, furniture, area carpets). Sometimes an included chattel is missing at closing and this can be resolved through your real estate lawyer.
Your lawyer can go over the mortgage terms with you to make sure you are aware of your legal rights and obligations pertaining to the mortgage, including any requirement to obtain a property appraisal, land survey or both. If you will have a high-ratio mortgage, because you are unable to provide at least a 20 percent down payment, then you are also required to obtain mortgage loan insurance through Canada Housing and Mortgage Corporation or Genworth. We can discuss what's involved for a private mortgage as well.
Inform You of Government Incentives for First-Time Home Buyers
As a courtesy, your lawyer will tell you about government programs that can save you money as a first-time home buyer. Under the federal government Home Buyer's Plan (HBP) (https://www.cra-arc.gc.ca/hbp/),* each person can borrow a certain amount of funds from his or her Registered Retirement Savings Plan tax-free, provided that both the HBP and RSP withdrawal conditions are met. A non-refundable first-time home buyer's tax credit of a certain amount is also available if you or your spouse or common law partner qualify (https://www.cra-arc.gc.ca/hbtc/).* If you have a disability tax credit certificate, additional credits may be available.*
A land transfer tax refund of up to $2,000 from the Ontario government is available to first-time home buyers.
*note: Please verify with your accountant and/or financial advisor if these programs are still active and apply to you.
Protect You Legally
As part of our legal practice in real estate law in Ottawa and Eastern Ontario, we seek to protect you from legal complications. We will discuss how you would like to register the title (e.g., sole ownership, joint tenancy or joint tenants in common) and explain the difference between these options. Your real estate lawyer will purchase a policy of title insurance on your behalf and review its basic terms and conditions as well as its purpose. Title insurance is important for all real estate purchases.
Title insurance insures against loss due to defects or existing liens against the property's title, encroachment issues, title fraud, and errors in surveys and public records.
Close the Transaction and Inform You of What to Expect on Closing Day
Your real estate lawyer will meet with you in advance to answer all of your questions about closing, including the closing funds required, and when you can expect to receive your house keys. At the meeting, we will ask you to sign several documents after going over the documentation with you and informing you of the documents' meaning. You can expect to pay land transfer tax and HST, if applicable, which we will pay on your behalf. You will need to pay your lawyer's fees and disbursements, title insurance and other closing cost your lawyer will discuss with you. Your lawyer will then obtain the mortgage funds needed from your lender and hold the funds in trust until the deal closes.
Once your lawyer delivers the remaining funds due (i.e., less the down payment already made) to the vendor's lawyer, then the title will be transferred to you. After closing you will receive a reporting package with a statement of adjustments, the property deed, the title insurance certificate and any other applicable certificates.
Contact Our Ottawa Law Firm - Merovitz Potechin LLP
A real estate lawyer in Ottawa at Merovitz Potechin LLP can guide you through the first-time home buying process and protect your legal interests. We work hard to ensure that you are satisfied with our legal services. We know, from our ongoing repeat business, that we can earn your business for future real estate transactions. If you are a first-time home buyer, we are lawyers that can help. For all of your real estate needs, contact us in Ottawa (the best City in Canada) at 613-563-7544.