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What costs will I have when purchasing a home?
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Legal fees
- The fees for your lawyer's own services. Disbursements - expenses incurred by the lawyer as part of your sale or purchase - examples: land title fees, couriers, tax and title searches. GST is payable on the fees.
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Property tax adjustments
- A portion of the year's property taxes which are credited to the Seller if the Seller has already paid them, or credited to the Buyer if the Buyer will be required to pay them. If you're obtaining a new mortgage, the mortgage company may wish to hold back funds for future taxes as well. If you're obtaining a new mortgage, the mortgage company may wish to hold back future taxes as well.
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Transfer registration fees at the Land Titles Office. The Land Titles Office charges fees to register documents transferring ownership of property from one person to another and another fee is charged for
registering mortgage documents.
They also charge fees for discharging encumbrances, such as mortgages, from title to the property. |
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Insurance. |
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The mortgage company will not advance funds until title is transferred into your name and the
lender's mortgage is registered in the Land Titles Office. Because it takes time to register these documents at the Land Titles Office and to obtain the mortgage advance from the Lender, the sale
price may not be paid to the Seller until after the possession date. Until then, you will be unable to pay the Seller the full purchase price and will probably have to pay interest on the unpaid
amount. In Edmonton this rate is usually Alberta Treasury Branch Prime plus three (3.0%) percent. |
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Goods and Services Tax (GST).
There is a GST cost to the Buyer on the purchase of most new housing, although the Buyer will get a partial rebate in most cases. Most purchases of used housing will not require you to pay any GST. The Seller will give your lawyer a written statement that no GST is payable.
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Appraisal and inspection fees (if obtained). |
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A real property report or in the alternative Title Insurance. |
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Taking the guesswork out of buying your home
Buying a home may be the largest investment of your life! Often, many years of planning and saving have been required. It makes sense to hire an expert to
protect this investment - just as you use an expert to repair your car, to educate your children, and to take care of your health. Your lawyer knows about problems in the real estate business,
and can protect you from them if you ask for advice early enough. |
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If you are obtaining a new mortgage there are costs associated with it. |
Call my office to discuss these costs. |
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How Olesen Law Office assists in your purchase
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Ensures the real estate contract is in order. Examines title to the property ensuring all necessary
legal documents are submitted to Land Titles so that the property will be correctly conveyed to you. |
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Ensures that the adjustments are properly computed and that the purchase funds have been properly
disbursed. |
3. |
Ensures your property complies with required municipal compliance. |
4. |
Ensures that you have obtained a valid registered ownership to the property you purchase. |
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Taking the guesswork out of buying your home
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Buying a home may be the largest investment of your life! often, many years of planning
and saving have been required. It makes sense to hire an expert to protect this investment - just as you use an expert to repair your car, to educate your children, and to take care of your
health.Your lawyer knows about problems in the real estate business, and can protect you from them if you ask for advice early enough. |
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What should you know before buying? |
If a property is listed on the multiple listing service, what normally happens is that a
Buyer finds out about the home through a real estate agent (called a "selling agent"). Although the selling agent may assist you in finding a home, any commission the agent receives is
paid by the seller. When you find a home
you want to buy, your offer is put into writing on a printed form called a 'Real Estate Purchase Contract'. The real estate agent will have blank copies of this form, and will usually fill in the
form for you. The Real Estate agent will
also advise you about steps to take to protect yourself before signing the contract - examples are putting 'conditions' in the contract for financing approval and satisfactory inspection.
Take care to make sure that the offer states
exactly what you want to buy, and how much you propose to pay for it. Once an offer has been prepared, signed by you, and accepted by the Seller, that offer becomes a binding contract. |
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What should you do before signing any documents?
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Save any advertisements and get a copy of the photographic listing, if there is one, in case there
is a dispute about what you thought you were buying. |
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What other costs will you have? |
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There are other costs besides the actual purchase price involved in buying a home. Your lawyer or
Real Estate Agent can help you to understand the other costs involved. The following is the suggested check-list of cost items that you should discuss with your lawyer during the first interview:
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Legal fees
- The fees for your lawyer's own services, which may also include a component for out-of-pocket expenses or disbursements. |
2. |
Property tax adjustments
- A portion of the year's property taxes which are credited to the Seller if the Seller has already paid them, or credited to the Buyer if the Buyer will be required to pay them. If you're obtaining a new mortgage, the mortgage company may wish to hold back future taxes as well.
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Transfer registration fees at the Land Titles Office.
The Land Titles Office charges fees to register documents transferring ownership of property from one person to another. An additional fee is charged for registering mortgage documents. |
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Insurance for fire and other hazards. |
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Opening of utilities account. |
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Goods and Services Tax (GST).
There is a GST cost to the Buyer on the purchase of most new housing, although the Buyer will get a partial rebate if the purchase price is less than $450,000. Most purchases of used housing will not require you to pay any GST. The Seller should give you a written statement that no GST is payable. There is also GST payable on your lawyer's fees and disbursements and surveyor's charges. Currently, there is no GST on the Land Titles registration charge.
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Appraisal and inspection fees (if obtained). |
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Any time a new mortgage is obtained in real estate there are costs associated with it. Your
lawyer can advise you about these costs. |
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Are you buying a condominium? |
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With the rising costs of single family dwellings, more and more new home buyers are being attracted
to condominiums. In addition to the check-list of costs, the following is a suggested check-list concerning condominium ownership that you might want to discuss with your lawyer or Real Estate
Agent: |
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Condominium units and common property. |
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Owners' rights and responsibilities regarding property. |
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Group government and restrictions under any by-laws of the Condominium Corporation. |
4. |
Condominium maintenance fees and services. |
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How a lawyer can help you buy your home? |
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From this brief summary of potential problems you can see the complicated legal details that the
purchase of property involves. For this reason, you need the assistance of a lawyer. Your lawyer will do whichever of the following tasks are necessary to ensure you a trouble-free purchase:
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Ensure that the contract fully reflects your understanding of the agreement before your lawyer
approves of your signing it. |
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Examine the title to the property and ensure that the necessary legal documents ai c properly
prepared and registered so that the property will be correctly conveyed to you. |
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Ensure that you understand clearly the terms of any mortgage or other financing arrangements for
which you are accepting responsibility. |
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Ensure that the adjustments are properly computed and that the purchase monies have been properly
disbursed. |
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Certify to you that you have obtained a valid registered ownership to the property you purchase.
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Help you understand the full costs of home purchasing. |
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Help you understand the tax (principal residence provisions) advantages of a home investment. |
In summary, your lawyer's role is to help you get what you bargain for, at the price you agree to
pay, and on the terms you understand. |
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Buying a Home or Condominium We Recommend:
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If you are purchasing a new [to be built] home or condominium, have your lawyer review
the Real Estate Purchase Contract before you sign the Real Estate Purchase Contract. |
Make the Real Estate Purchase Contract 'subject to' financing/mortgage approval (even if
the proposed mortgage is within the limits of your 'pre-approved mortgage'); |
If possible set the Closing/Possession Date on a business day (i.e. not on a Saturday or
holiday when banks, Land Titles and lawyer's offices are closed); |
Ensure the Real Estate Purchase Contract specifically states which items are
included/excluded from the purchase (eg appliances, ceiling fans, central vac and attachments, chandeliers/light fixtures, garden sheds, garage door openers and controls, etc.). If in doubt put
it in writing in the Real Estate Contract; |
Carefully inspect or have a professional inspect the property before you sign the Real
Estate Purchase Contract (or make the Real Estate Purchase Contract conditional on obtaining a satisfactory inspection report). Remember 'Buyer Beware' and 'Purchase As Is' apply; |
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Buying a Condominium? We Recommend (in addition to the above):
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Review the condominium financial statements (available from seller or real estate agent)
before you sign the Real Estate Purchase Contract (i.e. to determine if the condominium project is financially sound and not subject to large condominium fee increases in the future); |
Inspect the entire condominium project (and not just the unit you are purchasing) to
determine if any major repairs are required (eg. repaving of parking lot, replacement of shingles, etc.). If major work is required your future condominium fees may have to be increased to pay
for the work; |
Review the condominium bylaws (available from seller or real estate agent) before signing
the Real Estate Purchase Contract (eg. are pets allowed?). |
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Selling Your Home or Condominium? We Recommend:
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Before listing your home for sale, check with your mortgage company to determine amount of mortgage
prepayment penalty if any; |
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If selling and buying another home at same time determine if your bank will provide 'interim
financing' commonly called 'bridge financing' and determine the cost of the interim financing; |
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If the Purchaser will be assuming your mortgage, check with your lawyer to determine if you will be
held accountable for payments by the mortgage company if the purchaser does not make the mortgage payments; Also, contact your mortgage company to confirm that your mortgage is assumable; |
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Always ensure the Real Estate Purchase Contact specifically includes what items are included,
excluded from the sale (eg. appliances, ceiling fans, light fixtures, central vac and attachments). If in doubt put it in writing in the Real Estate Purchase Contract; |
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Always have appropriate documents (eg. For house: Real Property report/Compliance Certificate,
property tax notice and receipt, assignable warranties, etc.; for condominium; condominium financial statement, current condominium budget, by-laws) available for review by prospective
purchasers. These documents can be positive selling features and can prevent delays in getting a Real Estate Purchase Contract signed and the sale completed.
Note: do not give the
original Real Property Report to the purchaser, your lawyer will need it. |
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Conclusion: |
If you have any questions or comments relating to the purchase or sale of real estate please call
before you sign any documents. It is difficult, and in most cases impossible or very costly, to correct mistakes or problems after documents have been signed. Your telephone enquiries will be
answered without charge or obligation. |
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