Disclaimer: This article is intended for the purposes of providing information only and is to be used only for the purposes of guidance. This article is not intended to be relied upon as the giving of legal advice and does not purport to be exhaustive.
Congratulations! This is a big step, so let’s take a moment to celebrate it! Finally, after all the saving and planning, the offers, and discussions with your realtor, you are buying your first home.
However, now you may have many questions about the next steps that are ahead of you. For example, how can you ensure a smooth closing?
Let’s go through some of the questions that our clients frequently ask so you can feel confident and prepared between now and when you move into your new home.
Do I need title insurance?
This is a question that we are asked all the time, and the answer is an unequivocal yes!
Title insurance is technically not a requirement for homeownership, but we cannot recommend it strongly enough. In fact, many lenders will require that title insurance be purchased before funding a mortgage.
What is title insurance? It guarantees that the person selling your home has clear legal ownership and will transfer this to you. In addition, if there is a problem with the title that ends up as a registration on title after closing, such as a lien for unpaid property taxes or unpaid utilities, then the policy protects you against any financial loss.
Title insurance will also protect you in most cases if there are disputes with your neighbour as to the property line.
What is title fraud (or title theft)?
Title insurance will also protect you against title fraud. As we move further into digitalization, title fraud is an ever-growing threat. You need to be prepared and protected. The costs are, quite literally, too high to take such a risk.
Title fraud, or title theft, is where criminals can steal the title or apply for a mortgage against your home without your knowledge. In fact, you may not discover title theft until you try to refinance or sell your home.
In the absence of title insurance, you will be responsible for the legal fees and other costs to remove a fraudulent mortgage from your title. The cost to resolve these problems can easily total hundreds of thousands of dollars.
A prudent homeowner will invest in title insurance. It is a relatively low-cost, one-time payment that will protect you against many problems and give you peace of mind that your home is protected. In addition, your homeowner policy will cover you for the entire period that you own that property, whereas your lender policy will change if your lender changes, or it could change if you refinance with the same lender.
When should I get a lawyer involved before buying a home?
You should contact a lawyer as soon as you have an offer prepared and before it is firmed up (i.e. conditions are waived or fulfilled). The sooner a lawyer is involved, the more smoothly your purchase process will be.
When you work with a lawyer from early on in the process, your lawyer can deal with problems as they arise and avoid unpleasant surprises later on. Working with an experienced lawyer is one of the best decisions you can make when buying your home.
If you are purchasing a condominium, your lawyer will need time to review the status certificate and ensure that everything is handled correctly and according to the Condominium Act, 1998.
At the bare minimum, you will need a lawyer in place two weeks before the closing date. This is often, though not always, the deadline for completing a title search. This is why it is critical to get your lawyer involved as soon as the offer has been prepared.
What should I budget for closing costs?
You want to make sure that you are prepared for the costs of buying your home. These costs will include:
- your down payment
- legal fees and reimbursements, including:
- regulatory fees
- title search fees
- title insurance
- Land Transfer Tax
I’m buying my first home, so the Land Transfer Tax is refunded, right?
This is not as simple as you may have been led to believe, so let’s outline the qualifications for the first-time homeowner refund.
You must have never owned a home anywhere in the world. You must have never appeared on the title for any property. It does not matter how you acquired the home, whether it was given to you, purchased, or as an inheritance.
Secondly, your spouse must not have owned any property anywhere in the world during the time that they were your spouse. Again, it does not matter if your spouse was gifted or inherited property.
If you are unsure whether you would qualify, feel free to reach out. Our team would be happy to clarify this issue for you.
What about my realtor costs?
You do not have to pay your agent if you are only purchasing a home. However, if you are selling a property and buying another one simultaneously, there may be a commission. Therefore, you should ask your agent what that split is for both selling and buying from them. As well, if you are selling your home, then there is normally a commission payable to your realtor in accordance with your contract with that realtor.
How does the closing day work during COVID-19?
Everything can be done virtually, including transferring funds. Even the keys will be left at the property in a secure location (such as a lockbox). At Beeksma Law, your entire transaction is completed remotely, from start to finish.
Who will connect me to the utilities for this property?
It is your responsibility to set up your accounts with the utilities for the property. However, as part of our closing process, we ensure that you have the information that you need to handle that process.
How do I find a great real estate lawyer?
You talk to the team at Beeksma Law, of course! Our team works together to ensure that buying your new home is a smooth process. As well, we understand that you may have a lot of questions about this process. Therefore, we will take the time to explain each step clearly so that you can be confident as we move forward.
Just note what one of our recent clients had to say: “Thank you for all your work in helping me to buy my first home. There were a lot of unknowns about it for me, so your patience with me, your willingness to explain things in simpler ways and your shared excitement were a huge blessing. Thanks again.”
When you work with Beeksma Law to buy your first home, you can expect excellence, prompt communication and advice that you can rely on.
If you would like to talk to our team, book a call here: [link]. We would be more than happy to answer any of your questions.