Good morning everyone, I’m joined with Alanna Stephen from Escarpment Law and we’re having a Starbucks just reviewing some of the tips and tricks that you need to consider when buying or selling a home.
I get asked quite often, ‘do I really need a lawyer when I’m buying or selling a home?’ And my automatic answer is, ‘yes of course’ but I love to give people the details as to actually why.
I can understand why people ask that question. A lot of work is already been done at the beginning they’ve seen their mortgage person they seen their agent I’m the end service provider. So I like to bring everything together We liaison really well with the agents with the mortgage people that we pull all the details in but most importantly what we do is we make sure ‘are you getting what you think you are getting?’ Are you selling only what you need to be selling?’ We protect your rights under the agreement of purchase and sale. We check title, we do something called execution searches, we make sure there are no liens on title and the key thing is protecting the client and making sure on closing date there are no surprises.
There is nothing worse than us finding out as agents that all the sudden there’s a $50,000 construction lien against your property and the lawyers missed it. Right or we weren’t advised of it. I love that with your clients you meet with them well in advance and give them the full rundown of: here is where the funds are going to go to and that you’ve done those checks.
We can certainly try to, we can’t always due to a number of circumstances but certainly I will be in contact with them I always advise clients to reach out early if possible we open the file we get moving we discover problems early on and then we can deal with him quickly in a headway fashion and get them resolved. I think that’s the real key is you’re hiring a lawyer upfront to make sure that you don’t have any problems So many people think of lawyers as a problem solver and I love that you’re already ahead of the problem. So our clients always rave about you. You’ve literally cut out the problems ahead of the time because you’ve time to deal with the other lawyer, deal with the other agent or deal with whatever that issue is. Thank you. Thank you, that’s great.
So one other thing that came out the other day that was kinda neat and I was chatting with you about it and that is deposits. How do deposits work when I’m buying a house in my agent says I need a $50,000 deposit. What does that mean? So the deposit acts as a security for the contract so you sign the agreement, the buyer then provides the deposit. That deposit gets held not with the buyers agent, but with the listing agents real estate brokerage. For the buyer what that means is they now owe that amount of money LESS to the seller on closing date. For the seller it means that that amount of money, if it’s $20,000 will be applied to reduce the commission that they owe their agent. That’s a good understanding. So if you’ve paid that $20,000 deposit you’ve already paid out towards the purchase of the house. Absolutely that’s money to your credit. So I buy a $820,000 house I’ve made it at $20,000 deposit I still owe $800,000.
Sometimes it gets confusing and it is a little fearful to think that you have to come for the big chunk of change and how does it work in the longplay. It does and especially that the deposit disappears right away it’s gone and no one seems to be quite clear where it’s going to resurface again. Right so if we were speaking to any buyer/seller today to make for a smooth transition what would you advise? Definitely get in contact with the lawyer, pick a lawyer take your agents recommendation early and reach out to that lawyer. The lawyer is going to have an opening letter for you and hopefully if it’s my office that you’re dealing with, we have a closing checklist really easily and comprehensively through the process. My biggest tip though would be if you were trying to buy and sell don’t try to do it all on the same day. Consider bridge financing and your agent, your mortgage person can talk to you about how that factors in. But the bottom line being: you buy before you sell and it makes for a single transaction. So your warning people that same day, ‘I close my house and move out and I move into my new house’ it doesn’t always go as beautifully as everyone would like it to go.
It surely does happen, I’m not saying that it can’t be done because it is done all the time but what ends up happening is a deal could fall apart which jeopardizes the deal on the other side but more practically speaking when the deals do come together, clients are not getting their keys for new home until very late in the day. So if you’re buying and selling same day you will not have your keys until late in the day.
And as an Agent I’m gonna say we can’t control when our clients get the keys. Now we do harass lawyers regularly and I get it’s always good to check with a lawyer when those keys are coming. Absolutely. On a side note we do always recommend to our clients when their meeting with you if they need to update their wills that’s a great opportunity at that time to do it and we’ve dealt with a lot of international buyers and sellers that you can easily advise on some of the tax issues there as well. If clients have a will, it’s not invalid just because its old. So what we like to do is meet with clients and go through the will and see is everyone still alive in the will? Are there instructions still the same? Powers of attorney are also important and we can talk about all of that in context of estate planning. Bigger issues I think you’re alluding to, if you have people who are living out of country and there selling property or living out of country in buying property those are all things that need to be discovered early on the process so that we can direct people accordingly.
Perfect. Well I thank you for today and I think the big takeaway here for people who don’t be scared the lawyer you’re not the dentist. We are not the dentist the sharp tools are in the drawer and that’s where they stay. You can give great advice on preparing for buying or selling right out of the gate.
So thank you so much.