Do you ever wonder why your favourite movie stars always look so good? Or why your local coffee shop is always spotless and decorated for the season? The reason is simple: they have a team of professionals who meticulously arrange every detail.

Before you start wondering how this relates to your home-buying journey, think about all the professionals you have standing behind you as you search for your dream home. Besides your real estate agent, you have a whole team helping guide you home, including a real estate lawyer.

What Does a Real Estate Lawyer Do for the Buyer?

Buying a home is likely the most significant transaction you will make in your lifetime. This life-altering decision requires the support of professionals to make sure that every step of the process is followed, ensuring that every “i” is dotted and every “t” crossed.

The person who takes care of the dotting and crossing on every legal document is your real estate lawyer. If you’re new to the home buying experience, you probably know you need a lawyer but may not be sure what role they play.

A real estate lawyer is necessary both for the buyer and seller. We’ll start with their role on the buyer’s side. They ensure the transfer of ownership, outlining the terms of your purchase agreement and a clear title to the property. That is their role at the most basic; it goes far beyond, including the following:

• Review the Agreement of Purchase and all other legal documents
• Ensure there are no claims listed against the property
• Arrange for Title Insurance
• Ensure you have a valid title upon closing
• Ensure property taxes are up to date
• Calculate the land transfer tax due on closing
• Draw up the mortgage documents
• Close the transaction and ensure all legal and financial conditions are met
• Exchange legal documents and keys with the seller’s lawyer

What Does a Real Estate Lawyer Do for the Seller?

The real estate lawyer’s role on the seller’s side is also related to ensuring the transaction goes smoothly and that all legal aspects are covered. They are focused on the mortgage payout and a smooth transfer of the property’s title. Just like on the buyer’s side, a real estate lawyer performs several key tasks, including:

• Review the Agreement of Sale and other legal documents before you sign
• Assist you with the negotiation of the terms and conditions
• Prepare the deed to your house
• Deal and remedy title issues as they occur
• Close the transaction
• Ensure all legal and financial conditions have been met
• Exchange legal documents and keys with the Buyer’s lawyer

When Do You Need a Real Estate Lawyer?

Whether you are buying or selling a home, you will need a real estate lawyer to register the transfer of property with your province’s land registry office. You are required to have a lawyer because lawyers can access Provincial Electronic Land Registration Systems. Every province has different regulations, but a legal professional must register a property and purchase a home to ensure it is legal.

While many real estate transactions in Canada use standard form agreements prepared by realtors, a lawyer will review and amend these contracts to ensure they cater to specific needs or situations. They can also conduct a title search to ensure there are no liens or other encumbrances on the property and help you understand and secure title insurance, which is becoming increasingly common in Canada.

How a Real Estate Lawyer Can Help with Complications

A real estate lawyer is indispensable when a housing deal faces complications, such as when a property is appraised at a value lower than the agreed offer. The attorney can provide clarity on the contractual implications of such a scenario. Many real estate contracts contain appraisal contingencies that allow the buyer to renegotiate or withdraw from the purchase without penalty if the appraisal is low. The lawyer can review the terms and advise on potential avenues of action. If both parties remain keen on completing the sale, the attorney can facilitate negotiations, ensuring that any new terms or price adjustments are legally sound and in the best interest of their client. A real estate lawyer can also investigate if the appraisal was conducted accurately and fairly, providing grounds for a potential challenge or request for a second opinion.

Can a Real Estate Lawyer Represent the Buyer and Seller?

In real estate transactions, it’s generally considered a conflict of interest for a single lawyer to represent both the buyer and the seller. This is because the interests of the buyer and the seller can often be at odds. The seller aims for the highest price and best terms, while the buyer typically wants the opposite. A single attorney representing both parties can be put in a difficult position, trying to serve two masters with diverging goals. Dual representation also increases the risk of malpractice claims, as either party might later believe they were inadequately represented if the deal goes awry. Each party deserves an advocate who can negotiate and advise with their best interests in mind. This becomes compromised when one lawyer tries to balance the needs of both parties.

Now that you better understand the real estate lawyer’s role, it’s time to choose one that will best represent you throughout the transaction. Choosing a real estate lawyer is something The Barnett Real Estate Team can help you with, as they often work closely with trusted professionals.

When eager new homebuyers begin saving up for a home, it’s easy to fall into the trap of putting on the blinders and fixating on saving up towards one number in particular.

However, buyers can often forget to factor in the additional secondary and tertiary costs it takes to buy a home. For all buyers, new or recurring, these are critically important costs to know about.

So, whether you’re a first-time buyer or have set your sights on moving up, here’s a breakdown of some of the true costs you need to consider when buying a home.

The Deposit

The first expense you should plan for is the deposit. This is a percentage of the total cost of the home that gets paid to the seller or Seller’s agent brokerage right away to essentially “hold” the sale and show the seller you are committed to the purchase. Typically, a deposit is 5-10% of the total purchase price and is required to be paid within 24 hours of the offer.

The deposit also must be made in the form of a certified check, bank draft, wire transfer or Etransfer, which means a homebuyer will need fast access to funds when putting in offers. This money is typically paid to the Seller’s Realtor’s Brokerage company or sometimes to the seller’s lawyer to be held in trust until the home closes.

The higher your deposit, the more committed you may look to sellers and the more desirable your offer comes across. Once the deal is finalized, your deposit money can go towards closing costs or towards your down payment, which brings us to the next cost you need to plan for.

The Down Payment

A down payment is different from a deposit. The down payment is a lump sum payment that goes toward the final purchase of your home. In Canada, there are some rules around down payments. The minimum down payment you can pay is 5% for a home valued at $499,000 or less and 10% for homes valued at $500,000-$999,000. For homes over $1 million, buyers are required to pay at least 20%.

If possible, paying more than the minimum down payment amount is better because it means you will pay your mortgage off sooner, pay less interest, and build equity more quickly.

There’s nothing more fun than fantasizing about what your next home could look like. However, with the help of our Featured Listings page here, you don’t have to daydream quite as hard.

Your Mortgage And Interest Rates

Once your down payment has been accepted, you can deduct that amount from the final sales price of your new home. To account for the rest of the sales price, you’ll need to take out a mortgage.

Mortgages are essentially loans for homes. The total amount of your mortgage depends on a few factors, such as the cost of the home you’d like to buy, the amount of your down payment, what you qualify for based on your annual income, what your monthly expenses are, and your employment history.

Generally speaking, it’s either banks or private mortgage brokers who grant you a mortgage. Whoever you secure your mortgage from, you’ll have agreed on the total amount of your loan and the structure of how you’ll pay it back. In most cases, it’s in the form of a monthly payment to your lender, which will include an interest rate.

This means that if you’ve agreed to put down $2,000 per month towards your home, for example, this fee, plus whatever your mortgage interest rates are, will go to your lender.

What About Mortgage Insurance?

If you are unable to pay the minimum down payment for your purchase, you may still be able to get a mortgage, however, you will be required to purchase mortgage insurance

Mortgage insurance is an added cost that protects the lender since the lender is typically taking on more risk with a lower down payment.

Are you planning on becoming a first-time homebuyer? Ensure you’re well-informed about everything you need to know about your upcoming purchase by reading these related posts:

• 5 First-Time Home Buyer Mistakes To Avoid
• First-Time Home Buyer Grants in Ontario
• Our Top 8 First-Time Buyer FAQs

Land Transfer Tax

The province of Ontario requires homebuyers to pay them an additional fee called the Land Transfer Tax. Essentially, this reflects the provincial government’s cost of permitting you to transfer the title of property between their jurisdiction.

While each province has its own set of Land Transfer Tax rates, the amount you have to pay increases depending on the cost of your new home. The more expensive your new home, the higher the percentage of its value you have to pay in Land Transfer Tax.

In Ontario, the set of Land Transfer Tax rates ranges from 0.5% to up to 2.5% of your home’s value. However, if you’re buying a home in the Greater Toronto Area, the City of Toronto requires buyers to pay an additional municipal Land Transfer Tax alongside the provincial tax.

The good news for first-time homebuyers is that you may be eligible to have all or part of this one-time fee refunded. Eligibility for this refund requires buyers to qualify based on these criteria:

• The buyer must be a Canadian citizen or permanent resident of Canada
• The buyer must be older than 18 years
• The buyer must occupy the home within nine months of purchase
• The buyer cannot have previously owned a home anywhere in the world
• The buyer’s spouse cannot have owned a home while being your spouse

If that applies to you, then you can apply for a refund of the full amount of your Land Transfer Tax or up to a maximum of $4,000.

Lawyers’ Fees

In order for both the buying and selling parties to ensure they’re conducting a legitimate and viable transaction, it’s a real estate lawyers’ duty to review and approve all of the necessary paperwork and legal documents that are included in a transaction.

While both the buying and selling parties hire their own respective lawyers, both legal representatives work together to ensure the real estate transaction is completed smoothly and no contractual or legal details are overlooked.

As you might imagine, there are a lot of formalities and details that go into a real estate transaction, which is why it’s crucial you hire a dedicated real estate lawyer who has experience facilitating these types of deals. As with all lawyers, though, their services come with a fee, which you’ll need to factor into your overall budget as a homebuyer.

Whether you’ve already got an idea of who you’d like to hire or need help finding a legal representative, we work with a set of highly respected and experienced real estate-specific lawyers that we’re always prepared to recommend to our clients should they need it.

There are no ifs, ands, or buts about it — the safest way to buy a new home is through the help of a knowledgeable and experienced local Realtor®. Learn more about what we do, how we help, and how you can find the Realtor® that’s right for you here:

• How To Hire a Real Estate Agent As a Buyer
• Why You Should Work With a Realtor®
• 8 Steps to Finding the Right Real Estate Agent

Your Homeowners’ Insurance

Homeowners’ insurance is a form of property insurance that protects you, the homeowner, from any damages to you or your property once you own your new home. It’s also a requirement to get a mortgage.

In paying a monthly fee to a homeowners’ insurance provider, you are in essence paying for peace of mind. If any damages were to occur to you or your new home, your insurance provider would provide you with funds (up to a certain number) to pay for the cost of fixing the damages.

Although all insurance plans and providers are different, most homeowners’ insurance policies generally cover the costs of things like interior damage, exterior damage, the loss or damage of personal assets or possessions, and any personal injury that occurs on your property.

Interested in learning more about how we can help you make your upcoming home purchase the best buy of your life? Read all about our buying process and how we’ve helped buyers just like you find their dream homes the first time here:

• How We Help Buyers
• Our Buyers’ Guide