Legal Advice for First-Time Home Sellers
As you may or may not know, the real estate market in this area is hot right now. If you're considering selling your home, you're not alone. Specifically, if there is an opportunity to generate a gain on your home sale. However, as a seller, there are a number of things you can do to protect yourself from a legal standpoint.
Enlisting an Agent
Enlisting the services of a real estate agent will give you access to comparable property sales in your area. They will also help you to assess the best price is to list your house. When deciding to work with an agent, you will be required to sign a listing agreement. This legal document binds you to your real estate agent for a certain amount of time outlined within the agreement. Most standard agreements last for 3 months; however, longer durations are also common.
If you do have an outstanding mortgage amount, it is always a good idea to first contact your issuing financial institution prior to your sale. This is important to find out your exact amount outstanding. This is also an opportunity to find out if there are any penalties if you are ending your mortgage early.
Dissecting an Offer
When an offer comes in, you are not obligated to accept it. Your agent can go over the offer with you to help determine if it meets your needs. There are several options you can consider including rejecting the offer completely or issuing a counter-offer. Your agent can help to draft any counter-offer and conditions you'd like to offer. If an agreement cannot be met, you can opt to end negotiations. If an agreement is met, the purchaser will put a deposit on the sale to secure the offer.
Once the negotiation process is complete, the house sale will be considered pending. Typically, the offer is subject to securing financing and passing a home inspection as well as legal review. Failure to meet these conditions can nullify the offer entirely. Typically, you will be required to fill out a Property Disclosure Statement (PDS). This is a legal document that is designed to give the purchaser insight into any areas that may require further inspection.
Enlisting a Lawyer
As with all legal documents, it is important to carefully read through the terms and conditions. Enlisting a real estate lawyer ensures that documentation is prepared properly. Your lawyer will verify the agreement of purchase and sale, prepare the transfer documents and pay out the mortgage and other disbursements. From a financial standpoint, your lawyer will receive the money from the purchaser’s lawyer, pay off any existing mortgage amount and provide you with an accounting of the proceeds from the sale.
Most private home sales are exempt from HST. However, check with the CRA, if you have completed significant renovations or are selling a newly constructed home. Your lawyer should also be able to help direct you as well.
New Land Registration
Before the sale of your home can be completed, your home must be registered under the new Land Registration Act. Usually the cost is between $500 and $1000 plus tax. Your lawyer can provide advice on this and on other costs involved in selling your home. Once a property is registered under the new registration system it will not need to be registered again. You can also find more information here, Land Registration Office of Nova Scotia.
If you have any additional questions about selling your home, please don’t hesitate to reach out to any one of our team, we’d be happy to help!