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The Ontario real estate market has taken us all on a wild roller coaster ride in the months leading to the pandemic and especially after. Many home buyers and real estate speculators (whether professional or amateur) entered this market with the intention of taking advantage of low interest rates and inflated market prices. 

Thanks in large part to interest rate hikes from the Bank of Canada,  prices have begun to stabilize over the last several months.  Even given the relatively high costs of property acquisition, there remains many home buyers that are still hopeful to enter the market, and many of these continue to be first time home buyers. 

Whether you are a first time home buyer or a seasoned real estate investor, the process can be quite stressful.  Many buyers are unfamiliar with the process once an Agreement of Purchase of Sale is signed, and what steps a lawyer takes to close the transaction on their behalf.  This article is meant to serve as a guide to the legal process, that we take, to ensure that your home closes, on time and for the price you bargained for.

A significant number of real estate transactions begin with you and your Realtor.  Make no mistake, they are the experts when it comes to the valuations, market trends and guiding you through the process as a buyer or investor.  

As lawyers, the deal is normally forwarded to us, after it is firm, by the deal secretary or administration department of your Realtor’s brokerage.  We open a file and allocate it internally to the handling lawyer, and the respective clerks. 

As a purchaser, it is important for you to secure the funds necessary to purchase the property,   whether this is through personal funds or through lending.  We suggest those clients requiring lending client secure approval for the mortgage, or in order to avoid the stresses of securing funds at the last minute.  Over the last number of months, many lenders have been forced to deny mortgages to buyers, who otherwise would have qualified before the rate increases.  

Our office will perform a number of searches on the property and buyer, to ensure you are not inheriting financial and property issues that were not otherwise considered when you entered into the Agreement of Purchase and Sale.  These searches include title searches, writ searches, and in some cases zoning and tax department searches. 

We communicate any issues or concerns with the vendor’s lawyer and work with them to move the file to closing.

If you have secured a mortgage, we are instructed by your lendors, who become our clients as well as yours, in completing the necessary paperwork to receive the funds.  We hold these funds in our trust account, and use that along with the balance of your down payment, to pay the Vendors the agreed upon purchase price. Lenders require numerous conditions are fulfilled prior to the release of funds, including that you have secured a title insurance policy on the property, and have provided sufficient hazard insurance to protect their investment in you and your new home. We work with you to secure those and provide them to the lenders on your behalf. 

Once the transaction is complete, meaning the property is transferred into your name, the keys are released to you, as the buyer. Prior to the pandemic, those keys were held at our office and provided to you by hand. Increasingly, the trend has become that a lockbox will be left at the property by the listing agent, and the lockbox code will be provided to our office.  We must hold that code in escrow until the transaction has closed, and we provide that you to once the property is yours.

The entire process consists of many steps, and many communications with not only you, as our client, but the vendor’s lawyer, lenders, insurance providers and Realtors.

Our office is very mindful that while we close hundreds of real estate transactions each year, most home buyers only purchase once every 5-7 years.  We understand that the transaction is important to you, and that makes it important to us.   We take a collaborative approach to work together with you and your lender to ensure the process is smooth, and well informed.  We want our clients to feel comfortable to communicate with us throughout this process.  We bill a pre determined fee for our services, instead of hourly billing, so that clients needing more attention and communication do not feel a financial reluctance to reach out.  

Feel free, as do our clients, to reach out to our real estate team with any questions you might have about your upcoming purchase, and how Kay Law can help you close your very important transaction.