Sale of a Residential Home
Selling your home can be a stressful event. Ensuring that you have an experienced team that is prepared to guide you through the legal issues and the process is essential. We can assist with:
Review of the Agreement of Purchase and Sale
Obtain and review title
Obtain property tax information
Obtain mortgage pay out statement (if applicable)
Prepare transfer documents and meet with clients to review and execute
Arrange with buyer’s lawyer for closing arrangement with the lawyer for the buyers
Handle sales proceeds- this includes paying out title encumbrances, real estate commissions, any other loans or liens, lawyer fees, and seller proceeds.
Net Sale Proceeds
Net Sale Proceeds is the amount of money which you will have in your pocket when the sale transaction is complete.
To calculate the Net Sale Proceeds, take the total sale price for the property and subtract all debts, liens and charges against the property which must be paid as part of the sale transaction and then add back any interest earned on your funds.
Real Estate Commission
Real estate commission is usually a percentage of the selling price plus GST, and this must be paid by the seller's lawyer upon completion of the transaction.
Our fee for a standard residential real estate sale transaction is:
Sale of Home (including payout of one encumbrance) $645.00*
Payout and Discharge of additional encumbrances
(mortgage/lien/judgments/etc.) per item $50.00*
Certain transactions which involve commercial property, condominiums, new homes, farmland or employee relocation may affect our fee and it would be advisable to phone our firm to confirm the fee quote.
*Legal fees do not include taxes and disbursements
These items are costs which the seller of a house must pay. The lawyer pays these costs on behalf of the seller at the appropriate times. These include the mortgage discharge fee payable to the Land Titles Office, title investigation charges, couriers and other miscellaneous charges all of which generally range between $150.00 - $250.00.
The annual property tax bill may be paid to the municipality by the purchaser, the vendor, or through the municipal tax installment payment plan. The taxes are then adjusted based on each party’s share of the taxes which have been paid or which are to be paid. The tax period is ALWAYS the calendar year from January 1 – December 31, however the due date for payment varies from one municipality to another. In Winnipeg, taxes are due as of June 30, while in rural areas the due date is typically September or October. The required adjustment will be based on the possession date and on whether the taxes have been partially or fully paid. An adjustment is required to credit the party who has paid or will pay more than their proportionate share of the property taxes.
If you have been paying taxes with your mortgage payments, there will be an adjustment with your mortgage holder as part of the mortgage payout process. This is because the mortgage holder has been setting aside the tax portion of your mortgage payments in a separate savings account. There is always either some money in the account or else the account is overdrawn. This credit or debit will be applied against the balance owing on your mortgage when the mortgage is paid out.
The lawyer attends to the payment of any mortgages which are registered against the title. Unless your mortgage is at the end of a term, or is an "open" mortgage, you may have to pay a penalty to the lender to have it discharged, and the amount of the penalty may vary considerably. Mortgage payments are not like rent payments. Rent, when paid, covers into the future. A mortgage payment, when made, is applied backwards in time, bringing you current to the date of that payment. As a general rule, you must make mortgage payments that fall due on or before possession date however each lender operates differently and you may be responsible for mortgage payments for several weeks after the possession date.
If your home has been pledged as collateral for a personal loan, then the loan may have to be paid. Sometimes a "collateral mortgage" or a "caveat" is placed against a home as additional security for a loan, and if so, it must be paid from the sale proceeds unless other arrangements are made with the lender.
Liens, Judgments & Utilities
If your home has a judgment or a builder's lien registered against it you will have to pay out the lien or judgment and have the registration discharged. Additional legal fees and disbursements apply.
All utilities must be paid up to the date of possession and any home improvement loans through a utility company or government agency will need to be paid in full.
If you are purchasing a new home with a possession date which coincides with the possession date for the sale of your home you may need to arrange for interim financing until we can release your sale proceeds. Additional legal fees and disbursements may apply.
A seller earns interest on unpaid sale proceeds until they are received at the seller’s lawyer’s office. The interest rate you earn on these funds is calculated at the purchaser’s mortgage rate.
GST & RST
GST is payable on the real estate commission, legal fees and most disbursements. RST is payable on the legal fees..
We are pleased to provide a FREE CONSULTATION to discuss any questions you may have regarding real estate.
Contact our office at (204) 989-4236 to schedule an appointment.
All website content is the property of Tacium Vincent & Associates and may not be used without permission. All information provided is general and is subject to change without notice. For advice specific to your circumstance you should consult a lawyer. Please contact us if you have questions about our services or need the assistance of a lawyer.