Real Estate: 10 Simple Steps on Buying and Selling Property in Ontario

simple steps to buy and sell property
Venturing through the blogging community has afforded me the opportunity to see and read how different property transactions can be from country to country. Here’s the “average” real estate transaction process in Ontario.

Start Here

1.    The majority of buyers start with a Real Estate Agent. This is a person who is registered and licenced through an association that regulates the real estate agent’s position. The agent is the authorized individual who will arrange access to houses that are for sale, and takes the buyer through them. 

 The Bank

2.    Around the same time that the buyer is selecting an agent, the buyer should also have a bank representative or a mortgage broker who is obtaining a pre-approval for a mortgage, if one is required. A pre-approval gives the buyer an idea of what they could be approved for, if and when they need financing to purchase a home. 

All the houses… and then the contract

3.    The buyer looks at homes… often, many homes. Some people only need to see a few, and others will visit tens of houses, sometimes hundreds, before finding the one that meets their needs.  Once a home is found, the agent will write up an Agreement of Purchase and Sale, which is an offering to the sellers of what the buyers want. It’s a contract that sets out the following:
 
a.    The price the buyer is willing to pay
b.    The non-refundable deposit the buyer is willing to put down
c.    The closing date
d.    How long the seller can take to answer the contract
e.    The date for title search (to make sure the title to the property is clear and without problems)
f.     What the buyer wants included in the house purchase
g.    What the seller will not include in the house purchase
h.    What the seller rents (like a water heater) that the buyer is willing to assume
i.      Any conditions, like the buyer needs time to have the bank approve the contract, or to do an inspection of the property, or a myriad of other options.  

Seller’s Turn

4.    The seller will review the offer, and if the seller accepts, this creates the Agreement of Purchase and Sale.
 
real estate buy sell
 

Buyer’s Next Steps

5.    The buyer then needs to contact the bank for approval on financing for that house, seek out insurance, obtain an inspection, etc. Those are the most common conditions. While the buyer is working on these, the seller cannot entertain any other offers, as the seller has entered into this agreement pending waiver or fulfillment of the conditions.
 

The Old Handshake… on paper.

6.    Once the buyer waives all conditions, the buyer and the seller have made the contract firm and binding, and the agreement then should be delivered to the lawyers. If the buyer and seller are strangers, they will need their own lawyer. The lawyer will need the agreement in order to start work on the files.
 

Out of sight….

7.    Between the time that the buyer and seller sign the agreement, the lawyers’ offices will be hard at work. The buyer’s lawyer checks to make sure that the property is what the seller said it was, and that no one else has a claim to the property. The seller’s lawyers’ office starts the process of cleaning up any outstanding taxes, mortgages, etc that are to be paid on closing.
 

Time to Pack

8.    The buyer and seller do not have much to do during this time, other than to pack their homes, and to contact their utility companies. The buyer may need to finalize some steps with the bank to ensure all is well with financing.
 

Autograph, anyone? And on this one, and this one, and this one.

real estate buy sell9.    Closer to the date selected for closing, each party meet their prospective lawyer to sign some paperwork. The seller leaves a key with his lawyer, and the buyer brings in money to their lawyer.
 

Keys before Money or Money then Keys?

10.On the day of closing, the lawyers will exchange money for keys. They will also exchange the deed, which is done electronically. Because much of the process is electronic (like receiving mortgage money or registering a deed), it is unclear as to what time the transaction will close. The registration process is available until 5 pm that day. Also, once the transfer/deed is registered, that is the actual moment that ownership changes hands. The buyer will receive keys, and the seller will receive proceeds, or the money he sold his house for.
 
While there are so many variables to the above, most of the transactions close on the date chosen in the Agreement. It’s a good system, and pretty simple to follow, in my opinion.
 
 
real estate buy sell
 
Do you have questions on real estate? Ask me anything. With more than ten years in the legal part of real estate, and more than 15 years in rentals, property management, bank lending and more, I am more than happy to answer your questions. 
  
DISCLAIMER
This post is for entertainment purposes only, and shall not be relied upon. The steps above are for the purposes of illustrating a straightforward property transaction in Ontario and shall not be construed as legal advice, legal instruction or otherwise. Any questions or concerns with particulars of the above should be presented to the appropriate expert in that field of study.
 
 

2 thoughts on “Real Estate: 10 Simple Steps on Buying and Selling Property in Ontario”

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