If you’re thinking about selling your home in Ontario, you have probably already started thinking about your asking price, getting the house ready for the market and finding the right buyer.
But there is another important part of the process that sellers sometimes overlook: the real estate lawyer.
Do you actually need one? When should you hire one? And what does a lawyer do when you sell your home?
The short answer is yes. For a typical residential sale in Ontario, you should plan to hire a real estate lawyer to handle the legal closing and transfer of ownership. Even if you decide to sell your home privately without a real estate agent, you will still need legal assistance to complete the transaction properly.
Here is what you need to know before putting your home on the market.
Why Do You Need a Real Estate Lawyer to Sell Your Home?
Selling a home involves more than finding a buyer and agreeing on a price.
Once an offer has been accepted, there are legal documents to prepare, title matters to address, mortgage payouts to arrange and funds to distribute. The ownership of the property must also be legally transferred to the buyer.
In Ontario, most transfers of property title require lawyers to complete the required registration steps. This is why hiring a real estate lawyer is a standard and essential part of completing a residential sale.
Your real estate agent helps you market the property, negotiate offers and navigate the selling process. Your lawyer handles the legal work required to close the transaction.
Both roles are important, but they are not interchangeable.
What Does a Real Estate Lawyer Do When You Sell?
A real estate lawyer handles several important tasks throughout the closing process.
Reviews the Agreement of Purchase and Sale
The Agreement of Purchase and Sale outlines the terms of your transaction, including the purchase price, deposit, closing date and any conditions or additional terms.
Your lawyer can explain the legal implications of the agreement, review amendments and help you understand your obligations.
It is particularly important to seek legal advice if an offer contains unusual terms, complicated conditions or circumstances that could affect the sale.
Ideally, you should identify a real estate lawyer before accepting an offer, so you know who to contact when questions arise.
Reviews Title and Property-Related Matters
Your lawyer reviews relevant title information and identifies legal matters that may need to be addressed before closing.
These may include registered mortgages, liens or other interests affecting the property.
If you have an outstanding mortgage, your lawyer will typically obtain the payout information from your lender and arrange for the mortgage to be discharged as part of the closing process.
This is important because selling your home does not automatically mean your mortgage has been paid off or removed from title.
Prepares the Closing Documents
Your lawyer prepares and coordinates the legal documents needed to complete the sale.
This includes the documentation required to transfer ownership and complete the transaction through Ontario’s electronic land registration system.
You will also need to provide identification and sign the necessary documents within the required timeframe.
Your lawyer will explain what is needed and help keep the closing process on track.
Calculates Closing Adjustments
There may be financial adjustments between you and the buyer that need to be accounted for on closing.
For example, property taxes or certain prepaid expenses may need to be adjusted based on the closing date and the terms of the agreement.
Your lawyer reviews the applicable amounts and includes the necessary adjustments in the closing calculations.
Receives and Distributes the Sale Proceeds
Once the transaction closes, your lawyer handles the funds according to the closing arrangements.
This typically involves paying out the outstanding mortgage, accounting for applicable legal fees and closing expenses, and distributing the remaining proceeds to you.
The amount you receive will depend on your mortgage balance, transaction costs and other applicable expenses.
If you are planning to use the proceeds to purchase another property, knowing approximately how much you will receive can help you plan your next move.
When Should You Hire a Real Estate Lawyer?
You do not necessarily need to wait until your home sells to start looking for a lawyer.
In fact, we recommend researching your options early so you are not scrambling to find someone when an offer comes in.
There are three useful stages to keep in mind.
Before listing your home, you can research local real estate lawyers, compare fees and ask questions about the closing process.
Once you receive an offer, your lawyer can provide advice about legal terms or complications that require attention. If you have questions about an offer before accepting it, seek legal advice before becoming committed to terms you do not fully understand.
After the offer is accepted, your lawyer will begin coordinating the legal work required for closing and advise you about the documents and information they need.
The earlier you have a lawyer lined up, the easier it is to prepare for the next steps.
Can I Sell My House Privately Without a Real Estate Agent?
Yes. In Ontario, you can sell your home privately without hiring a real estate agent.
However, selling privately does not remove the need to complete the legal side of the transaction.
You will still need to arrange the sale, negotiate with potential buyers, agree on the terms of the transaction and coordinate the closing with your lawyer.
If you are selling privately, it is especially important to understand the Agreement of Purchase and Sale before signing it. A lawyer can advise you on the legal implications of the terms and help address issues that arise.
A lawyer does not replace the services of a real estate agent, and a real estate agent does not replace the services of a lawyer.
The two professionals have different responsibilities.
How Much Does a Real Estate Lawyer Cost in Ontario?
Legal fees vary depending on the lawyer, the property and the complexity of the transaction.
When requesting a quote, ask what is included in the fee and what additional costs you may need to pay.
Depending on the transaction, additional charges may include:
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HST on applicable legal services
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Title searches or other searches and disbursements
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Electronic registration and related transaction charges
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Mortgage payout or discharge-related expenses, where applicable
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Additional legal work required to resolve complications
Ask for an itemized estimate so you can budget appropriately.
It is also worth asking whether the quoted fee includes the work required to discharge your existing mortgage, as this is an important part of many residential sales.
The cheapest quote is not necessarily the best choice. You want a lawyer who communicates clearly, explains the process and has experience handling Ontario residential real estate transactions.
What Happens If There Is a Problem Before Closing?
Most home sales proceed without major legal complications, but issues can arise.
For example, there may be an unexpected title issue, a delay obtaining mortgage payout information, a disagreement about an obligation under the agreement or a concern about whether the transaction can close as planned.
If something goes wrong, your lawyer can explain your legal options and advise you on how to proceed.
This is one reason it is important not to treat the legal closing as a last-minute formality.
If you have concerns about your obligations under the Agreement of Purchase and Sale, speak with your lawyer before taking action that could affect the transaction.
Do I Need a Lawyer If I Am Buying Another Home Too?
Yes, you should plan for legal representation on both transactions.
If you are selling your current home and buying another property, your lawyer can help coordinate the legal requirements for each transaction.
The timing can be especially important if the sale of your existing home is intended to fund the purchase of your next one.
Your lawyer can explain the closing requirements and help you understand how the timing and financial arrangements affect each transaction.
If the properties have different closing dates, or one transaction is delayed, you should discuss the potential implications with your lawyer as early as possible.
Choosing the Right Real Estate Lawyer
When choosing a lawyer, look for someone experienced in Ontario residential real estate transactions.
Here are a few questions worth asking:
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How much do you charge for a residential sale, and what is included?
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Are mortgage payout and discharge services included?
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What additional disbursements or expenses should I expect?
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How will you communicate with me throughout the transaction?
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What documents and information will you need from me?
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Who should I contact if an issue arises close to closing?
A good lawyer should make the legal side of the process easier to understand and help you feel prepared for closing day.
Selling Your Home in Wellington County? We Can Help You Understand the Process
Selling a home involves several moving parts, from determining the right asking price and preparing the property to reviewing offers and getting ready for closing.
At Edge Real Estate Team, we help sellers navigate the process from the initial conversation through to a successful sale. We can explain the role of your real estate agent, help you understand the steps involved and coordinate with your lawyer as the transaction progresses.
Our team brings more than 75 years of combined experience and local knowledge of Wellington County and the surrounding communities.
Whether you are selling in Fergus, Elora, Guelph, Centre Wellington, Puslinch, Guelph/Eramosa or a nearby community, having the right professionals in place can help you approach your sale with greater confidence.
If you are thinking about selling, start by understanding your home’s market value, planning your next steps and choosing the professionals who will help you through the process.
Selling Wellington County by the Yard.