Overview of Our Residential Purchase Services
At MBLAW, we understand that selling a property is often a significant milestone, possibly marking the largest financial transaction you may undertake in your life. We are here to help you navigate the intricate process of residential property sales, including homes, investment properties, and condominiums. From reviewing and drafting agreements of purchase to examining the tax implications of your transaction, our skilled real estate lawyers ensure a smooth, error-free process.
If you’ve already signed a firm agreement, our extensive knowledge and experience in handling real estate transactions can still be invaluable in preempting and addressing any issues. We strive to not just assist you in the present but also forestall potential future complications.
Beyond the financial transactions and technicalities, we are aware that selling a property often carries a personal and emotional dimension for our clients. That’s why, at MBLAW, we pride ourselves on providing personalized care and attention to each transaction, ensuring that your residential sale is handled with utmost professionalism and consideration.
Residential Sale Process: A Step-by-Step Guide
Navigating the intricacies of a residential property sale can often seem daunting, filled with a labyrinth of legal details and documentation requirements. Yet, with MBLAW by your side, you’ll find this process streamlined, transparent and tailored to your needs. We pledge to walk hand-in-hand with you, demystifying each step and making sure your property sale journey is as smooth as possible. Here’s how we’ll approach it:
Reach out to our team using our online contact form. Once we have established that we can efficiently handle your case within the stipulated deadlines, we will send you our retainer agreement and a comprehensive guide to residential sales.
Gathering Essential Documents
We will provide you with a detailed list of the necessary documents required for the process. These may include your agreement of purchase and sale, amendments or waivers, the current property tax bill with proof of payment, mortgage statement or line of credit statements linked to the property, identification documents, details of rental equipment contracts, and information on existing tenants if any.
Preparation and Review of Legal Documents
After receiving your documents, we will request a discharge from your mortgage company and start preparing the statement of adjustments and other essential closing documents.
You will then meet with your lawyer to review and sign all the sale-related documents. This meeting is to ensure you are fully informed and comfortable with the details of the sale of your home or investment property.
Closing the Sale
On the agreed closing date, we will receive funds from the buyer’s lawyer, register the change of ownership, and distribute the funds. The proceeds from the sale will be used to settle your mortgage, any applicable commission, property taxes, and legal fees. Any remaining funds will be directly deposited into your Canadian bank account.
Residential Sale: Frequently Asked Questions
If you have an existing mortgage on your property, it needs to be paid off on or before the closing date of the sale. We coordinate this process on your behalf. Funds from the sale are first used to pay off the outstanding balance of your mortgage, including any prepayment penalties or discharge fees if applicable. After these deductions, the remaining funds are transferred to you.
When selling a primary residence in Canada as a non-resident, a 25% holdback of the purchase price is required. For example, if your property sells for $1,000,000.00, the buyer’s lawyer must withhold $250,000.00. If the sale proceeds are not sufficient to cover this holdback, the seller is responsible for providing the difference as part of their closing costs.
Next, the seller applies for a clearance certificate under s. 116 of the Income Tax Act. The Canada Revenue Agency (CRA) calculates the capital gain or other taxes owed from the sale of the property, and the held-back funds are used to pay this tax. Once the tax is paid, the CRA issues a clearance certificate, and any remaining funds are returned to the seller.
For non-residents selling an investment property, the holdback could be as high as 50% according to the Income Tax Act.
When examining an offer to purchase, ensure your real estate agent knows which fixtures you wish to retain. This is particularly crucial as staging becomes increasingly popular, and any fixtures used for staging should be explicitly excluded from the agreement.
Typically, rental equipment will have a service sticker with a company name. Contact this company to verify if the item is rented, its monthly cost, and the term duration. Additionally, some rental items might appear on your Enbridge bill. Performing this due diligence when selling your property is crucial to avoid unnecessary delays or financial losses.
MoveSnap is a platform accessible via an invitation from your lawyer. It features a checklist of tasks that need to be completed before your closing date, such as coordinating movers, transferring utilities, or changing the address on your driver’s license. The platform is interactive: for instance, clicking on “change utilities” will display the electricity provider for your current and new address. Once you confirm the utility transfer, it’s done, and the progress graph on MoveSnap is updated to reflect this. The cost of the MoveSnap concierge service is included in your closing costs, and there are no additional charges. It’s entirely optional to use but can be an excellent tool if you choose to utilize it.