The unstoppable real estate market is on target to close over 583,600 MLS® home sales across Canada by the end of 2021. Every one of those sales will generate economy building spin-off spending in directly related industries including; mortgage brokers, appraisers, insurance brokers, home inspectors, and most importantly conveyancing attorneys. Buyers and Sellers both need the professional services of a conveyancer to transfer a property title.
In British Columbia, the legal representative you hire is either a conveyancing attorney or Notary Public. Only notaries or lawyers carry the proper Errors and Omissions Insurance to facilitate the purchase and sale of real estate closings. This is for your protection. The firm or person you hire is responsible for drawing up and managing the transfer of regional compliant documents, and ensuring legal ownership is transferred from the seller, to the buyer, and that the buyer does not pay until the property is legally registered in the buyer’s name.
Every property transfer has unique and individual circumstances and the transfer happens on a very tight timeline that conveyancers work within to make the process happen. In BC, 90,000 residential unit sales have taken place in the last year and every one of those land title transactions required two qualified conveyancers to complete the title transfer. The great demand for this necessary service has led to an increase in conveyancing fees in many notary and solicitor offices across the province. Buyers should budget to pay between $1500 – $2000 dollars in conveyancing fees in their closing costs, but it is best to know up front.
If you are shopping around for the best mortgage and rate, it now makes sense to shop around for the best deal in conveyancing at the same time. Many buyers do not know they can negotiate a fixed fee with their solicitor, rather than an hourly rate. Every dollar counts when you are making the biggest purchase of your life, and budgeting for fees without getting a quote could lead to an unwanted surprise when you go to sign paperwork and pay for the final critical step.
As a buyers, the price of the property you are purchasing ultimately determines what your total closing cost will be. They can range from 1.5 – 4% of the selling price. There are free online closing cost calculators that you can access like, https://thinkhomewise.com/tools/closing-cost-calculator/ which will allow you to choose the province of your purchase for accuracy of the calculation. Another great online resource that breaks down the complex closing costs process is https://www.ratehub.ca/closing-costs
Once a seller has accepted your Offer to Purchase, you need to make sure you have enough fluid money to close the deal. You will have a set period of time to remove all subjects, including any financing needed, and then monies need to be immediately available. Make sure they are not tied up in any investments or RRSP that takes time to cash out. Your first payment outlay will be your deposit. A deposit that counts towards your down payment is required when an Offer to Purchase is accepted by a seller. The deposit proves that you have the financial means to make the purchase and you’re comfortable taking on some level of risk until the deal closes.
Once you have removed all subject contingencies, your realtor will provide your conveyancing attorney the signed purchase contract. Your conveyancer will first perform due diligence that includes researching the title to the property and determining any mortgages, liens or encumbrances that are registered against the title and review of any non financial charges that may affect the property. The documents are then forwarded to the seller’s lawyer or notary for execution.
One to three days before closing, you will meet with your lawyer to sign documents and deliver the balance of the down payment, any other closing costs, and the conveyancing fees. Your conveyancer will also handle the disbursement of any and all other fees and amounts associated with the transaction, to include any real estate brokerage fees, property & municipal taxes that are due and payable, payout monies for existing loans/mortgages, homeowner insurance premiums for the purchaser/borrower, inspection fees, and homeowner association dues. The lawyer will then register the transfer and mortgage documents, arrange for the seller’s lawyer to pick up the funds and notifies the buyer when the purchase has completed.
Many complex and critical steps take place behind the scenes when you enter into a real estate transaction and you should always choose to work with a licensed and reputable conveyancing professional. Get references, ask friends & family for referrals or ask your licensed real estate agent who they recommend from experience. Once you have found the firm or Notary Public you want to hire, get a quote for your transfer specific conveyancing fee. You will then have a more accurate assessment of your final closing cost, and that is worth the peace of mind.
Freddy & Linda Marks, 3A®Group RE/MAX Nyda Realty