Buying or selling a home can be a complex process, and navigating the legal aspects of real estate can be challenging for both buyers and sellers. At Ellison Law, we understand the importance of providing our clients with the information they need to make informed decisions. In this blog post, we'll be answering some of the most frequently asked questions about real estate law when buying or selling a home.

 

1. What is real estate law, and how does it apply to me?

Real estate law governs the purchase, sale, and transfer of property. It covers a range of legal issues, including contracts, deeds, mortgages, and zoning laws.  There is a vast array of real estate laws that come into play when buying, selling or refinancing a home and it’s important to understand how these laws may affect you. Hiring an experienced real estate lawyer who knows real estate law is crucial when buying or selling a home to ensure that you are protected and that the transaction is legal and valid.

2. Do I need a real estate lawyer when buying or selling a home?

Real estate laws and the way they affect to real estate transactions can be complex and difficult to understand, which is why you should hire a real estate lawyer when buying or selling a home.  A real estate lawyer’s role in the buying selling or refinancing a home is to look out for and protect your interests by advising you and navigating the complex web of real estate laws, rules and regulations. A real estate lawyer can provide valuable advice and guidance throughout the process, from drafting and reviewing contracts to conducting title searches and ensuring that all legal requirements are met.

3. What is a title search, and why is it important?

In a real estate transaction, title to property is transferred from the seller to the buyer, and it’s imperative that you receive good and clean title a at closing when buying a home.  One of the most important roles of your real estate lawyer is to make sure that you get good and clean title at closing, which is why they do a title search. A title search is a process of examining public lan records to verify a property's ownership and legal status. A title search will also reveal if there are any liens, mortgages, or other legal issues registered on title that could affect the property's ownership or value, and need to be removed from title prior to closing.

4. What are closing costs, and who pays for them?

Closing costs are the costs associated with the purchase or sale of a home, such as legal fees, land transfer taxes, search costs, title insurance and appraisal fees. Typically, the buyer and the seller each pay their own closing costs.

In addition to legal fees, you will be required to pay your lawyer’s disbursements.  Disbursements are out of pocket expenses incurred by your lawyer that are necessary to complete your real estate transaction, such as the cost of a title search or registration fees. A savvy client who asks the right questions can save money on disbursements. The vast majority of lawyers use a real estate software platform called Unity, which costs the client about $280 (plus HST) in disbursements.  However, there is other real estate software that is less expensive and is just as good as Unity. We don’t use Unity at Ellison Law, and our software saves the client over $200 in disbursements. When hiring a lawyer, always ask what real estate or conveyancing software they use and how much it will cost you in disbursements.  Choosing a lawyer that doesn’t use Unity can save you on closing costs. 

5. What is a real estate agent's role in the buying or selling process?

A real estate agent can provide valuable assistance when buying or selling a home, from helping you find properties that meet your needs to negotiating offers and contracts. However, it is important to note that real estate agents are not lawyers and cannot provide legal advice.

6. What is a home inspection, and do I need one?

A home inspection is an examination of a property's condition, including its electrical, plumbing, and HVAC systems. A home inspection is not required by law, but it is highly recommended to identify any potential issues that could affect the property's value or safety. Many times, an offer to purchase a home is conditional upon the buyer being satsified with the results of a home inspection.  When buying a home, it’s always “buyer beware”. So, it’s important to know things like whether the home has a leaky roof, a cracked foundation or broken furnace before you buy.  If there are problems, a home inspection could save you a lot of money in repair costs.

7. What is a “condition”, and how does it work?

A closing is a condition is something that must be met or satisfied before an agreement to purchase a home is binding and becomes firm.  Conditions are generally specific to each transaction and they are included in your agreement of purchase and sale.  For example, a buyer may include a condition that their purchase is dependent or conditional on passing a home inspection or obtaining mortgage financing. If the condition is not met within a stipulated time-period set out in your agreement of purchase and sale, the transaction will come to an end and the deal will be canceled.

8. What is a closing date, and how is it determined?

The closing date is the date on which the purchase and sale of a home is completed., and ownership is transferred from the seller to the buyer. The closing date is typically determined by mutual agreement between the buyer and seller, and is set out in your agreement of purchase and sale.  It is very important to understand that “time is of the essence” in all agreements for the purchase and sale of real estate.  This means that a real estate transaction must close on the date specified in the agreement unless all parties consent to a change in the closing date.  There are legal consequences if, for whatever reason, you are unable to close on the closing date, and you could be responsible for any costs the other side incurs because of your delay or even face legal action.  When hiring a real estate lawyer, it is important to have trust and confidence that the lawyer you choose will be able to close your transaction on time and as scheduled.  .

9. What is a mortgage, and how does it work?

A mortgage is a loan used to finance the purchase of a property that is secured against the property. The borrower agrees to repay the loan over a set period, and the lender holds the property as collateral. This means if the borrower defaults and fails to repay the loan as scheduled, the lender may foreclose on the property or sell the property and apply the proceeds of sale to repay the mortgage loan.

10. What is title insurance, and do I need it?

Title insurance is not legally required in Ontario, but it is often recommended by real estate lawyers and lenders as a way to protect against potential issues with the title of a property.  Title insurance is a type of insurance that provides protection against loss or damage that may occur as a result of defects or issues with the title of a property.  It covers a wide range of issues that may arise with the title of a property, including fraud, forgery, undisclosed heirs, and errors in public records. It also covers issues related to zoning, survey errors, and encroachments.  All mortgage lenders will require the homewoner to purchase title insurance before they will fund a mortgage loan.  At Ellison Law, we always recommend title insurance to our clients and we are happy to review the various title insurance options that may be available to you.

 

Understanding real estate law is crucial when buying or selling a home. Working with a real estate lawyer and a qualified real estate agent can provide valuable guidance and ensure that the transaction is legal and valid. By asking the right questions and obtaining the necessary information, you can make informed decisions and navigate the process with confidence.

At Ellison Law, we specialize in real estate law and can provide you with expert legal advice to help you navigate the buying or selling process with ease. 
To learn more about our services and how we can assist you with your real estate legal needs, please click here. Should you have any questions or require further assistance, we invite you to contact us at (647) 955-8640 or email us at david@ellisonlaw.ca. Trust Ellison Law to be your trusted partner in navigating the complexities of real estate law with confidence and peace of mind.