By Geoff Kirbyson
Along with a REALTOR® , in order to ensure that your real estate transaction is appropriately taken care of, you’ll also require the services of a real estate lawyer.
That’s because a number of critical pieces in a real estate transaction can only be dealt with by a legal professional, said Ken Clark, president of WinnipegREALTORS®.
In fact, one of the first questions he’ll ask a client on either the buy or sell side is, “who is your lawyer?”
If they say they’ve got one, he makes sure they don’t mean a family law or corporate lawyer because real estate work is a very industry-specific.
For those without representation, he recommends using the same care in selecting one that they would in choosing a REALTOR® or any other business professional. Most REALTORS® can make a number of recommendations and let the clients make the final choice, he said.
Here’s how it works on the buy side: The lawyer will request that the would-be buyer send them a copy of the offer to purchase so they can open up a file.
(If the offer is subject to a number of conditions, such as financing or a home inspection, and the mortgage isn’t approved, Clark said most real estate lawyers won’t charge you anything.)
Once you get past this stage, however, the meter starts running.
Most real estate lawyers will quote you a fixed fee in advance, which will include tasks such as doing title searches, zoning searches and making disbursements, and it usually comes out to about $1,100, Clark said.
Lawyers typically do land titles searches to determine if there are any mortgage obligations or outstanding liens on the property, which would have to be paid off before the house could officially changes. Zoning enquiries will tell them if the entire house and garage was built within the property lines or if there are any encroachments.
For example, many houses in Wolseley encroach on their neighbours’ property — which usually results in an annual fee of around $50 to the City of Winnipeg — but the findings come in handy if the new owners want to demolish and rebuild the garage because now they can do it entirely on their own land.
As the deal moves towards closing, the lawyers on the selling side will receive the funds from their counterpart on the buy side, they’ll check on the title and zoning, too, and, of course, get the keys.
Neither the money nor the keys are handed over, however, until the transaction has been cleared by the provincial land titles department.
The fees on the selling side are about the same as they are on the buying side, Clark said.
While some duties could be handled by a do-it-yourselfer, non-lawyers can’t perform a number of important duties, not the least of which is holding money in trust.
“It’s critical that you get a lawyer,” Clark said. “The money spent will be just a fraction of the total selling price and it will be well worth it.”
Lawyers can uncover all kinds of things. People can put liens on properties without notifying the property’s owner. Sometimes homeowners forget that they took out a second mortgage on their property in the form of a home improvement loan.
“This kind of protection is sourced out by the lawyer. You don’t want to find out there’s not enough money to pay the vendor for the property,” Clark said.