Once an offer is accepted or a home is sold firm, many buyers and sellers feel that the most difficult part of the process is complete. In reality, a significant amount of work still needs to happen before closing day. Much of it is handled by a real estate lawyer.
Many people begin by searching terms like what is a real estate lawyer, what does a real estate lawyer do, or how much is a real estate lawyer. These are important questions, because in Ontario, a real estate lawyer plays an essential role in nearly every purchase and sale.
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What Is a Real Estate Lawyer?
A real estate lawyer is a lawyer licensed by the Law Society of Ontario who handles the legal aspects of buying, selling, or refinancing property.
Your real estate agent helps you find the right home or buyer, negotiate the price, and work through the conditions of the agreement. Your lawyer ensures the transaction is completed properly. They confirm that the property can legally change hands, manage the transfer of funds, and register the necessary documents.
In Ontario, ownership is transferred through the electronic registration of documents, which is completed by lawyers. For this reason, a real estate lawyer is a necessary part of the process.
Do you want to learn more about the process when buying a home? The posts below will fill in the details:
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Why Real Estate Lawyers Are Important
A home is often the largest purchase a person will make. A real estate lawyer protects that investment by confirming that the buyer is receiving clear title, that the funds are handled securely through the lawyer’s trust account, and that every term of the Agreement of Purchase and Sale has been met before closing.
When an issue arises, such as a title concern, a missed deadline, or a delay in mortgage funds, it is typically the lawyer who identifies the problem and works to resolve it.
What Does a Real Estate Lawyer Do for the Buyer?
For buyers, the lawyer’s role is to ensure they are receiving exactly what they have agreed to purchase.
This begins with a review of the Agreement of Purchase and Sale. Buyers who would like this review completed before the agreement becomes firm can speak with their agent about including a lawyer review condition.
The lawyer then conducts a title search to confirm the seller owns the property and to identify any mortgages, liens, easements, or other registrations that may affect it. They also check with the municipality for unpaid property taxes, work orders, or other outstanding matters, and arrange title insurance to protect against certain title defects and fraud.
For condominium purchases, the lawyer typically reviews the status certificate, which provides insight into the condominium corporation’s finances, reserve fund, and any upcoming special assessments.
The lawyer also works with the buyer’s lender to prepare the mortgage documents, prepares the statement of adjustments that divides costs such as property taxes between buyer and seller, calculates land transfer tax, and applies for the first-time buyer refund when the buyer qualifies. Finally, they register the transfer so the property is legally in the buyer’s name.
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What Does a Real Estate Lawyer Do for the Seller?
Sellers also require a lawyer, although their responsibilities differ.
The seller’s lawyer prepares the documents that transfer ownership to the buyer and obtains a payout statement from the seller’s mortgage lender. They ensure the existing mortgage is paid off and discharged from title after closing, and they respond to any questions raised by the buyer’s lawyer during the title search.
Occasionally, an issue surfaces that the seller was not aware of, such as an old mortgage that was paid but never formally discharged, or a building permit that was never closed. The seller’s lawyer works to resolve these matters before closing so the transaction can proceed without delay.
Once the sale closes, the lawyer pays out the mortgage, real estate commission, and any other amounts owing, and then releases the remaining proceeds to the seller.
Looking for more selling tips? Start by reading the posts below:
- Why Sell Your Home with The Barry Team
- I Want to Sell My House Urgently. What Next?
- What Smart Upgrades Help Sell Your Home Faster and for More?
What Does a Real Estate Lawyer Do at Closing?
Closing is the point at which ownership officially changes hands.
In the days leading up to closing, clients meet with their lawyer, either in person or virtually, to sign the required documents. Buyers are advised of the exact amount needed to complete the down payment and cover closing costs.
On closing day, the buyer’s and seller’s lawyers exchange documents and funds, the transfer and any new mortgage are registered, and the keys are released. This process can take much of the day, so it is advisable to schedule movers with some flexibility.
It is also important to be aware of fraud. A lawyer will not change banking instructions through a casual email. Before sending any funds, always confirm the details by calling the lawyer’s office at a phone number you already have.
How Much Is a Real Estate Lawyer?
Legal fees vary depending on the lawyer and the complexity of the transaction. As a general guide, many buyers in Ontario can expect to pay approximately $1,000 to $2,000 in legal fees, plus HST and disbursements. Disbursements include costs such as title insurance, searches, and registration fees. Legal fees for a sale are often somewhat lower.
Costs may be higher for condominiums, new construction, rural properties, or transactions involving title issues or unusual financing.
Do you need customized guidance when buying or selling your next home? Our Niagara real estate agents are here to support you. Reach out at 905-357-8067 or email admin@thebarryteam.ca with any questions.
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