Selling your Home
When deciding to sell a home, the first person of contact is normally a real estate agent. Once an offer has been accepted by the seller, the real estate agent will prepare an Agreement of Purchase and Sale and forward it to the seller's lawyer and the purchaser's lawyer. The lawyer will then contact the seller to indicate whether they require any further information from the seller.
If the seller has not hired a real estate agent, the purchaser's lawyer will typically prepare the Agreement of Purchase and Sale. The Agreement will contain the purchase price, the amount of the deposit to be paid by the purchaser and a closing date. The Agreement will also contain a date for conditions to be met, such as the purchaser's financing, property inspection and review of the property title by the purchaser's lawyer.
Once all the conditions have been met, the agreement of purchase and sale is considered binding on both parties. The seller's lawyer will prepare the closing documents which include a Deed for the transfer of the property to the purchaser. The seller's lawyer will also prepare a statutory declaration stating whether the seller is resident of Canada. If the seller is a non-resident of Canada, they will need to obtain a clearance certificate from the Canada Revenue Agency.
The seller’s lawyer will also be responsible for paying the disposition costs at closing, which can include HST, real estate commission and legal fees. In most cases, if the property being sold is a used residential home, HST will not be payable. When calculating expenses on the sale, it should be noted that there is HST payable on the real estate agent's commission.
The seller's lawyer will contact the financial institution, which holds the seller's current mortgage, in order to obtain a payout statement as of the date of the closing. The payout statement will include a per diem amount, which is the extra amount owing to the bank for each day after the closing date until the payout funds are received by the bank. Depending on the financial institution, the payout statement may also include an amount for the financial institution to prepare and register a Release of Mortgage on behalf of the seller. If the financial institution does not provide this service, the seller's lawyer will prepare a Release of Mortgage and forward it to the financial institution to be signed. The seller's lawyer will then register the signed release at the Land Registration Office.
Once the seller's lawyer has received the sale proceeds from the purchaser's lawyer and provided the deed and supporting documents signed by the seller to the purchaser's lawyer, the transaction is considered "closed" and the purchaser takes possession of the home.
Once the Deed to the purchaser is registered at the Land Registration Office, the appropriate municipality will receive notification of the property transfer, after which the property assessments and property tax invoices should be sent to the new owners.
Selling your house is a big event, and it is important to discuss your obligations and rights with a lawyer.
Please note this is not legal advice for your specific situation.
