Have you bought a home or are in the process, but not sure what happens after you sign on the dotted line?
You’re not the first one, so we are here to teach you about what comes next, so you can handle the aftermath like a pro!
In this post we’ll go over why you need to hire a real estate lawyer, what do real estate lawyers even do and what the fees are.
Lawyers are going to be calculated as part of your closing cost and they are going to run you anywhere from about $1200 – $2000+. And that’s depending on how complicated your transaction is, and what type of home you purchased and the price you paid for your home. Within your lawyer fees there are disbursements, which are the lawyers overhead costs such as any photocopying or couriers that they may order for your transaction to be complete.
What does a lawyer do?
Your realtor is going to send a copy of the Agreement of Purchase and Sale to the lawyer so that they can review it and make sure it’s legally sound. They will perform a title search to ensure the title is clean and there are no liens or work orders as well as make sure the Sellers listed in the Agreement of Purchase and Sale are the ones that are actually on the title. Your lawyer’s also going to arrange for title insurance. Now, in our my opinion, title insurance is probably the best insurance you’ll ever purchase in your life, and it’s probably going to cost you around $200-$400, which is factored in to that original quote of the lawyer fee that we gave you. In the interim, if there are any issues that come up between the date of purchase and closing, your lawyer will help you navigate through them. Lastly, the lawyer will transfer the title into your name on closing and transfer all funds to the seller’s lawyer.
But what is title insurance?
Title insurance is protection for you just in case there are any deficiencies on the title that your lawyer didn’t find during their title search and once you’ve taken possession of the home. So any outstanding work orders, deficiencies, unpaid property taxes, encroachments on the property etc. The best thing about Title Insurance is that it’s a one time fee and you have it for the entire time that you own the house. Title insurance companies are easy to deal with and pay fees right away unlike car insurance or home insurance companies, where you have to fight it out with them.
Basically, if you do have a claim against title insurance, you’ll just contact your lawyer and your lawyer will deal with them directly. So, it’s really a great thing to have and it’s something that’s required anyways by your mortgage lender.
Once that’s arranged, you’re pretty much good to go.
A couple of days before your closing day, your lawyer will call you to arrange a time that you can come in to sit down and meet with them. At this meeting, you’re going to bring a certified cheque for the remainder of your down payment as well as your closing costs such as your lawyer fees, your land transfer tax etc. At this point you’re going to:
- Sign all the documents with your lawyer
- Review your mortgage terms
- Review the statement of adjustments detailing:
- Where all your money is being paid out to
- How much is coming in
- How much is being paid to the Sellers
- How much you’re getting from your mortgage lender
On the day of closing, once the lawyer has transferred the title, and received all the money and the money has exchanged hands, they’ll call to share the good news and let you know the keys are ready for pick up. You’re the official owner of your home, which is very exciting!
That’s basically lawyers in a nutshell. So, make sure to tune back here next week where we’re going to be discussing utilities: how to set them up, which ones you need to set up etc.
And of course if you have any questions, make sure to ask them in the comment section below!
We’ll see you back here next week.