The purchase of a home is often the largest purchase you will make in your lifetime. As such, there are several things to consider and keep in mind when going through this process. This article will discuss a few of the pitfalls to avoid in order to ensure that your closing runs smoothly.
Purchasing and Selling on the Same Day
Many would-be buyers already own a property that they need to sell in order to finance the purchase of their new home. Some real estate agents will let their clients know that if they are electing to purchase and sell on the same day, there may be unforeseen delays. The following is a non-exhaustive list of such delays:
- The sale of your home does not close until late in the day (the purchasers advance closing funds to your real estate lawyer late in the day) which in turn compromises your lawyer’s ability to close your purchase in a timely manner; and,
- Your lender, especially if they are a private lender, does not place the funds required to close the purchase of your home until late in the afternoon on the closing date.
If you can, you should aim to close your purchase and sale on different days. If you sell your property before you purchase, this should give your lawyer enough time to deal with your purchase (due to the availability of funds). If you purchase before you sell and receive a bridge loan from your lender until you sell your home, it can be paid out at the time you sell your property.
Don’t go for the Cheapest Option
Buying or selling a home is not a cheap endeavour. There is significant time dedicated by your real estate agent, your mortgage agent, your lender, and your real estate lawyer to ensure your transaction is completed correctly. Just as when you conduct your research on which real estate or mortgage agent you will hire to help you purchase your home and finance it, you should exercise the same degree of attention when you choose your real estate lawyer.
Some real estate lawyers will offer legal services at rates that do not align with what others are charging. This might be a red flag because something that would normally be a part of your real estate legal fees may be omitted from the fee you have been quoted. It is not easy for a real estate lawyer to provide an exact amount regarding legal fees (as they are subject to change based on the complexity of your matter) but when you consult with a lawyer, they should be able to provide you with a rough estimate on how much you can expect to pay. When hiring a real estate lawyer, speak with them directly as you can often gauge their comfort level and experience in relation to your transaction.
Provided you have retained a real estate lawyer well before your closing (the general rule is one month) and responded to their inquiries in a timely manner, your closing should happen smoothly. Giving your lawyer ample time to work on your file will ensure any hiccups prior to your closing are dealt with prior to closing.
At Mills & Mills LLP, our lawyers regularly help clients with a wide range of legal matters including business law, family law, real estate law, estate law, employment law, health law, and tax law. For over 130 years, we have earned a reputation amongst our peers and clients for quality of service and breadth of knowledge. Contact us online or at (416) 863-0125.