Concierge - Legal

KEN HOYT

COSTS OF A RESIDENTIAL REAL ESTATE TRANSACTION - SELLERS

To state the obvious, when a person buys or sells a home, there are various expenses involved. The following summary will hopefully give one a better understanding of the expenses which are usually applicable in the sale of a single family residence in an effort to avoid unnecessary financial surprises.

The lawyer's role when acting for a Seller consists of:

• preparation of documentation;
• providing answers to any valid problems regarding title and zoning;
• paying off the Seller's mortgage; and
• paying the real estate commission.

1. Disbursements
   

   
   Fortunately for Sellers, disbursements on a sale are minimal. One can expect to pay for items such as:
   

   
   

   • registration of a discharge of mortgage . . . $70.70
   • property tax certificate . . . $50.00
   • Law Society of Upper Canada transaction levy surcharge . . . $53.50
   • miscellaneous expenses . . . $75.00

   summary, disbursements on a sale are approximately $250.00

2. Adjustments
   

   
   As in the case of a purchase, items such as oil, property taxes and condominium fees are adjusted for up to the day of closing. If the Seller, for example, has paid property taxes or condominium fees which, when calculated on a daily basis, covers a period beyond the closing date, the Seller is reimbursed by the Buyer on closing. If the Seller has underpaid, the Buyer receives a credit on closing. If the house is heated by oil, the Seller fills the tank for closing and is reimbursed by the Buyer for a full tank.
   

   
   

3. Legal Fees
   

   
   Assuming there is one mortgage to discharge, my legal fees for a sale excluding GST are between $450 and $575.

Q1: When does the Seller get the money from the sale? A1: The money can be made available on the actual day of closing but, again, it is difficult to say in advance when exactly it will be ready. My preference is for the Seller to pick up the money at anytime on the following day.

Q2: When does the Seller have to move out? A2: The Seller's obligation is to provide vacant possession upon completion of the transaction and the standard Agreement of Purchase and Sale states that the Agreement is to be completed no later than 6:00 p.m. Arguably, the Seller should vacate no later than 6:00 p.m. on the day of closing.

Q3: What is the Seller's obligation in terms of the condition in which they leave the property? A3: The Seller should leave the premises in a clean and tidy manner. All garbage should either be removed or bagged and left out front for collection.

Q4: Should a Seller let the Buyer have a key prior to closing in order to facilitate the Buyer's move? A4: I do not recommend giving the Buyer a key prior to closing. You as Seller are taking a risk (albeit remote) that the Buyer accesses the house prior to the closing and finds something not to his or her liking and refuses to close. However, the risk is remote and, ultimately, it is the decision of the Seller. The Seller may know the Buyer personally and have no reservations about doing the Buyer a favour.

A FINAL NOTE: LEGAL FEES AND SERVICE

When selecting a lawyer, a Seller or Buyer should not necessarily make their selection based solely on which lawyer quotes the lowest fee. Real estate is an area of law where service matters and the manner in which your lawyer completes your sale or purchase will have a direct impact on your state of mind. I firmly believe that the more information a Seller or Buyer has shortly after the agreement firms up and all conditions are removed is essential in making the process problem free and in avoiding unnecessary surprises. Consequently, as part of the service I provide at no additional cost to you is a meeting at my office once your deal is unconditional. This meeting is 30-40 minutes in length during which I will calculate all of the financial costs of your particular transaction as well as provide you with a detailed list of all the things you must know and do to prepare yourself for closing.

Before selecting a lawyer, a Seller or Buyer would be well advised to satisfy himself or herself as to the following:

1. Most importantly, is the lawyer intending to meet with you at the very outset of the transaction in order to finalize all costs and explain the process?
   

   
   

2. Did the lawyer return your initial call promptly to discuss the transaction? Was the lawyer informative or vague? Was the lawyer personable? Would you enjoy dealing with this person?
   

   
   

3. Will the lawyer be meeting with you personally at the time of closing to explain the documentation and have it signed or will it fall to staff members to fulfill this function?
   

   
   

4. How long has the lawyer been in practice? Is real estate an area of law that the lawyer concentrates in?