Townhouse + Condo Living

When to Bring a Lawyer into the Home-Buying Process

Posted on 30th March, 2013


Frequently, Canadian home buyers don’t bring in a lawyer until a deal is done. We sign on the dotted line, then take our purchase agreement to a lawyer who does a title search, registers the deed and handles the transfer of funds. We know we need a lawyer to do this but no one wants to spend any more on legal fees than they have to, right?

So knowing where to engage your real estate lawyer is key.

Making an Offer to Purchase

After you have found the condo you want to buy, you need to give the vendor an Offer to Purchase (sometimes called an Agreement of Purchase and Sale). It is very helpful to work with a lawyer to prepare your offer, in addition to your realtor. The Offer to Purchase is a legal document and should be carefully prepared.

Would you know that the use of ‘encroachment,’ instead of ‘easement,’ could mean the difference between zero and the cost of title insurance, extra legal fees and the drafting of encroachment agreements? Food for thought.

Following an Offer to Purchase

Now that your lawyer has helped you prepare an Offer to Purchase, the realtor presents the offer to the vendor. What can you expect to happen next? There are three possible responses:

Response 1.
The vendor accepts your offer. The deal is concluded and you move on to the next steps in the buying process.

Response 2.
The vendor makes a counter-offer. The counter-offer might ask for a higher price, or different terms. You can sign the offer back to the vendor, offering a higher price than your original offer, but lower than the vendor’s counter-offer. If the vender accepts this counter-offer, the deal is concluded.

Response 3.
The vendor makes a counter-offer, asking for a higher price or different terms. If a counter-offer is returned to you at a higher price, ensure that you know exactly how much you can afford before you start negotiating. You don’t want to get caught up in the heat of the moment with costs you can’t afford. You reject the counter-offer because the price is still too high, or you can’t agree to the conditions. The sale doesn’t go through, and your deposit is returned.

In the interim, a real estate lawyer can protect your interests when it comes to financing. You don’t want to be stuck in a situation where financing is foisted upon you.

A lawyer is particularly important when it comes to purchasing a property that has not yet been built. Home buyers may need a lawyer’s help to decipher the lengthy purchase agreements that are common with condo purchases.

Legal fees can vary depending on whether you are buying a condo or house, a new construction or resale. The important thing is to get an all-inconclusive quote, which will include the registration charges, title insurance premium, courier charges, the mortgage work on a purchase transaction and applicable taxes.

When it comes to price, you aren’t necessarily doing yourself any favours by choosing the lawyer with the lowest fees.

Unlike other provinces, Saskatchewan does not have a lawyer referral program to check to see if your lawyer is in good standing, so ask around and do your research.

Closing Day

Closing day is the day when you finally take legal possession and get to call the house your home. The final signing usually happens at the lawyer’s office.

These are the things that happen on closing day:

– Your lender will give the mortgage money to your lawyer
– You must give the down payment (minus the deposit) to your lawyer. You must also give the remaining closing costs.
– Your lawyer then

– Pays the vendor
– Registers the home in your name
– Gives you the deed and the keys to your new home

As it turns out, hiring the right lawyer, early in the home-buying process, can actually save you time, risk and most importantly, money. So be prepared for a purchase of this size and importance. It’s a biggie.

Credit Unions versus Banks for Mortgage Lending

Posted on 15th March, 2013

Credit Unions

Mortgage lenders come in all sizes, ranging from Canada’s Big Six to tiny wholesale lenders and credit unions. Banks and credit unions are both financial institutions, but this is where the similarities end.

There are two distinct differences between these lenders: banks are for-profit companies and serve stockholders, while credit unions are not-for-profit organizations and serve its members. Secondly, banks have a national and international focus, while credit unions set their sights on their local community.

Credit unions are financial cooperatives. Their products, services and operations — and even their physical appearance — may resemble those of banks, but they are locally owned and invest their profits in the communities where they operate; where their members live and work.

Unlike banks, credit unions are autonomous. Each one has its own brand identity, management and Board of Directors, but they’re united through provincial centrals. These provide financial, technology and trade services to their member credit unions.

Today, there are 771 credit unions in Canada, with a total of 3,117 branches. They hold combined assets of $296 billion and serve 10.2 million members (as at December 31, 2012).

There are 53 credit unions in Saskatchewan serving 264 communities through 297 service outlets.

Credit unions are provincially regulated. The Credit Union Act, 1998 provides the overall framework for the incorporation and regulation of credit unions in Saskatchewan.

Credit Union Deposit Guarantee Corporation is given responsibility by the provincial government to guarantee the full amount of funds on deposit with Saskatchewan credit unions and to provide preventive services that support the financial strength of credit unions.

Regardless of whom you choose to finance the purchase of your home, it is often the largest single financial commitment you will ever make, so shop carefully for your mortgage loan.

For a list of credit unions nearest you, click here.