Real Estate Contracts, What You Need to Know

As seen in SNAP Coquitlam.

After reading John Grasty’s column in last month’s SNAP, it reminded me how often buyers and sellers complete a Contract of Purchase and Sale using only their realtors; and involving their lawyer after the Contract subjects are removed and the deal is binding. Here are three easy suggestions to make a little easier the completion of your real estate transaction.

1. Include a subject clause providing time for your lawyer to look at the Contract and review a land title search. Your realtor will likely suggest a subject clause to arrange financing and home inspections. Why not include one that gives you a chance to seek a satisfactory review from your lawyer? Before making the deal binding, your lawyer may:

  • point to conditions in the Contract that you want to clarify or amend; or
  • provide you insights regarding easements or covenants registered against title which may impact what you can do with your new property.

2. Ask your realtor to confirm whether the person you are selling your property to is also selling his or her property on the same day. I have recently dealt with three sets of clients who were scheduled to sell their home and buy a new home on the same day. Alone, this may not have been an issue. However, in each case, the party to whom we were selling had also scheduled to sell their property on the same day. Generally, when selling and buying at the same time, the proceeds from the sale are used to fund, in whole or in part, the purchase. Due to undertakings given by your lawyer, it is only upon receipt of these sale proceeds that transfer of the legal title can be submitted and the purchase completed. Any hiccup on the sale of your property may delay receipt of sale proceeds and derail the completion of your purchase. The sooner any timing issues are noted, the sooner expectations can be managed and, if possible, dates amended.

3. Ask your realtor to request that the payment be made by way of certified cheque or bank draft. Some banks will place a hold on cheques drawn on the trust account of a lawyer or a notary. Whether you are intending to use your sale proceeds to fund a new home purchase or payout a mortgage, you do not want to discover that there may be a 5 to 10 day hold period, potentially jeopardizing a purchase or delaying payout of a mortgage. By requiring certified funds under the Contract, you ensure that your lawyer receives funds that can be paid out immediately. Without a term requiring certified funds, your lawyer can still arrange to certify a trust cheque. However, you will cover those costs and the process of certifying funds may cause a delay creating an unnecessary stress during your move.

Check in each month for further useful tips from the legal world. For a free legal consultation to discuss your business, real estate, employment, or estate matters, contact:

Jason D. Jakubec Lawyers West LLP

Main Line: 778-588-7051

Toll Free: 1-888-988-7052

Fax: 604-931-1713

Email: Jason@lawyerswest.ca Web: www.LawyersWest.ca