You and your realtor
will negotiate the terms of the purchase of the property.
Once the terms have
been agreed by you and the seller, you will sign the agreement in
its final form.
Normally the contract
will provide that within two business
days, you need to provide your deposit -- your realtor will
tell you who to write the cheque to.
There will normally
be conditions to the purchase such as financing or a home
inspection. Make sure that you are certain that these conditions
are satisfied prior to waiving them. If you don’t waive the
conditions, the deal falls apart and you get your deposit back. If
you do waive the conditions, the deal is then “firm”. That means
that you have to complete the deal or be in breach of your
contractual obligations as
well as forfeit your deposit.
agreement provides for an additional deposit once the deal is firm.
Sometimes an additional deposit is required by a specific date or
sometimes there is no additional deposit at all.
Once the deal is
firm, your realtor will arrange to have all relevant documents sent
to the lawyer you have decided to use. Don’t be sceptical of
lawyers who are recommended by the realtor. Lawyers are obligated
to act in your best interests no matter how they are introduced to
Your bank will also
need to know the name of your lawyer so that they can send mortgage
instructions out to that person directly.
If you have not yet
spoken to your lawyer, your lawyer or an assistant will contact you
to make sure that you want them to act for you.
Your lawyer will get
copies of the agreement for purchase from the realtor and mortgage
instructions from the bank. Your lawyer will then conduct searches
on the property and review the agreement to determine the steps that
need to be taken by their office.
As soon as possible,
you need to provide your lawyer with a description of how you want
to be described on the title to the property. If you are going to
own the property with another person, you have two options. One is
to be registered as joint tenants. This means that both people own
the property together and if one of them should die, the property
would transfer to the other person. Your second option is to be
registered as tenants in common. This is more usually the case
where you and the other person on title have contributed unequal
amounts of money to the purchase of the property and are not
married. You can then be registered to reflect the contribution to
the property such as one person having 30% and the other having
70%. If one tenant in common dies, their interest would be
transferred according to the wishes expressed in their Will.
Your lawyer will
prepare the necessary documents to be signed by the vendor and will
send those to the vendors lawyer.
At some point prior
to the possession date, your lawyer will receive the signed transfer of
land (something like a Bill of Sale for land) from the seller’s
lawyer. The transfer of land will transfer the property into your
name at Land Titles. The seller’s lawyer will impose a variety of trust conditions
on your lawyer regarding how they can use that transfer of land
however, since the seller has not received their money yet.
You need to call your
insurer and get insurance on the property beginning at midnight on
the possession date - your lawyer will not be able to fund your
mortgage without a binder letter from your insurer.
You will need to meet
with your lawyer, or a notary public in a location more convenient
for you, approximately one week ahead of the possession
date. At that meeting, you will sign the necessary documents. You
will also need to give your lawyer all of the money you are putting
down on the property at that time or at least two days prior to the
closing date. You will receive a buyer's 50A which includes,
if possible, all amounts needed for you to close the transaction.
These will include your lawyer's fees and disbursements as well as
the Property Transfer Tax payable to the British Columbia Government
at 1% of the first $200K and 2% of the balance.
Once your lawyer has
received all the signed documents and your money, your lawyer will
then send the transfer of land and your mortgage into Land Titles to
be registered. It is important that you get your lawyer signed
documents at least four days ahead of time so that there are no difficulties on possession.
On the possession date,
you normally do a walk through the property to determine its condition
while vacant. At this point, though, you are obligated to complete
the purchase of the property. If there are deficiencies in the
property which were not agreed to by you in the offer to purchase,
you will be in a position to sue the seller for them.
Once the property has
been transferred into your name and the mortgage has been
registered, your lawyer will be able to cash the mortgage money from
the bank. Once that has happened, your lawyer will send the
purchase monies to the seller’s lawyer and release all of the money
to the seller.
Your lawyer will then
report to (and bill) you and report to the mortgage company.
Your lawyer will
follow up to make sure that the seller’s lawyer keeps all of the
promises they made to your lawyer to protect your interests.