Purchasing A Home? Buyer Beware
Buying a home or commercial space is an exciting experience, especially if it’s your first time. Let’s focus on home buyers in particular, where couples and families sacrifice a significant amount of their savings and their time searching for the right home. However, there is nothing worse than finding the perfect home and being saddled into a bad contract. It’s important that home buyers don’t skip the critical step of having a lawyer review the contract to ensure that it’s fair, in your best interests, and that you understand your right and obligations.
Why Do I Need a Real Estate Lawyer?
Having a good real estate lawyer is like having that angel on your shoulder giving you good advice during the transaction. A lawyer can help you avoid some common problems with a home purchase or sale. Often, real estate agents use a one-size-fits-all form for their brokerage agreement, but this doesn’t always cover all of the extenuating circumstances. It’s essential to avoid vague and unclear terms, which can end up costing you in the long run.
The purchase agreement is the most important document in a real estate transaction. In it, it details the conditions that both the buyer and seller agree to. This also includes the purchase price and is a legally binding contract between the two parties. Most of the conditions in this agreement are designed to protect the buyer (e.g., repairs that need to be completed by the seller.)
The agreement also outlines when the buyer will take possession of the home and move in. Additionally, any conditions under which either the buyer or seller can legally back out will be written into this agreement. The most common reasons people back out of a deal is that they could not secure financing or there are legal matters that pertain to an estate. If a seller backs out of the deal for any other reason other than what’s outlined in the purchase agreement, the buyer may be able to recover damages in court.
The Purchase Agreement Is Signed. Now What?
The purchase agreement is a giant hurdle to overcome, but once it’s signed, it’s time to look at the seller’s title. This is necessary to establish the state of the seller’s title to the property to the buyer’s, and most like the financial institution’s satisfaction. A title search is ordered from Alberta Land Titles. A lawyer can help review the title search and explain any exceptions or encumbrances on title. What does this mean? It’s important to determine whether there are problems showing up on the title or issues with adjoining owners. Lawyers can explain the impact of easements and agreements or any restrictions that were imposed by previous owners.
We’re coming down the stretch toward the finish line. While the purchase agreement might be the most important document of the transaction, the closing is the most important event. During this time, there are certain adjustments and other closing paperwork are prepared; strict trust conditions are placed on the Buyers Lawyer, certain undertakings are given by the Sellers Lawyer, title or possession passes from seller to buyer, and the balance of the purchase price is paid. For the vast majority of homebuyers, the balance of the purchase price is paid through a mortgage loan.
A lawyer is helpful in explaining the nature, amount, and fairness of closing costs and ensures that all documents are appropriately executed. This can be a confusing and complicated process to a buyer and seller, but having a real estate lawyer on your side throughout the entire transaction ensures your rights are protected. Too often we see buyers giving money directly to sellers for property owned by someone else. A lawyer can order Title Insurance for you. Last year there were in excess of 3000 cases of property fraud in Alberta or other situations where property was placed at risk. It is our policy to order Title Insurance on each and every real estate purchase transaction. When a major builder declared bankruptcy, Builders Liens were placed on many of our clients and their neighbours homes. Each and every one of our clients had Title Insurance step in and protect them. We fielded a lot of nervous calls; offering relief that they were protected for a small one-time fee (under $230.00) they paid when they purchased their property. Many of their neighbours were not so lucky. Their lawyers had not purchased Title Insurance and these buyers were stuck dealing with their liens on their own, some in the tens of thousands of dollars.
Give yourself the peace of mind when you’re making one of the most significant purchases in your lifetime and have an experienced lawyer by your side throughout the transaction. Our team at Verhaeghe Law Office has a wealth of knowledge in the real estate business and help our clients make sound decisions that could impact the rest of their lives. For more information, please free to visit our main page and let us help you.