How to best prepare for your next real estate purchase to ensure everything goes smoothly
Purchasing a home is the combined effort of a team of people, who join together like pieces of a puzzle, to make the whole thing work. This very important team consists of you, your mortgage broker, your real estate agent and your lawyer. Your mortgage broker, your real estate agent and your lawyer know what part they are playing in the whole picture, but if you don’t know what to do or what to expect, the whole transaction can fall apart, or create significant inconveniences and stress for you.
Here are some of my thoughts on what to expect and what are good practices to follow during your closing:
1. I recommend clients that they come see me even before they make an offer, and especially before the APS becomes firm. The reason I suggest this as a good practice is because APS’s have conditions built into them with deadlines which if reached, cannot be undone if a larger problem is discovered later. The sooner you are aware of what you getting into, the better decisions you are able to make about whether or not this is a good transaction for you.
As an example, I recommend my clients who purchase condominium units to have their Agreements of Purchase and Sale conditional upon review of the Status Certificate (“SA”). The reason why this is so important, is because the SA reveals details about how the Condominium Corporation runs the condominium, including if there is any ongoing litigation, if there are any large expenses expected or if there is a large assessment placed against the unit. Who would want to purchase a unit with a $10,000 surprise assessment attached to it because the foundation of the building cracked two months earlier? If this is not uncovered before the deadline for the waiver of the status certificate, and you go ahead and waive it anyway, or you have no such condition in your APS, then you may be out of options.
2. I recommend that you have a mortgage pre-approval done before you even start looking, so you know how much you can afford to spend on your new property. As you start looking at properties, start looking at options for a lawyer who can assist you with the closing and once you consider putting an offer on a property, contact your lawyer and have them advise you about what conditions you can placed in the APS. Once an offer is placed and accepted, retain ask your lawyer to review the APS for you to identify any early risk.
3. Once the APS is signed and firm (meaning all the conditions have been waived), book an appointment with your bank to sign the mortgage papers. I cannot insist enough about how important the timing of this step is. Here is why: the sooner you sign the papers, the sooner the bank can process your application, the sooner they can instruct the lawyer with respect to their requirements. Banks have long lists of requirements and conditions needed to be fulfilled before they allow the transaction to close. Since some of these conditions could take longer to fulfill, you want to make sure you allow yourself and your lawyer enough time to have a reasonably low stress closing.
If you have any questions about this topic, I would love to help!
PLEASE NOTE THAT THE CONTENT OF THIS BLOG IS MERELY FOR INFORMATION PURPOSES AND DOES NOT CONSTITUTE LEGAL ADVICE.
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Raluca M. Soica, BBA, CPA, CMA, JD
647.280.6497
info@rms-law.ca
www.rms-law.ca
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Raluca M. Soica 7/11/2020 |
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