On the Oak Ridge blog I’ve already made a case for why you should partner with a real estate agent when buying or selling your home. But do you know why and when you need to engage a real estate lawyer? According to Sharie-Ann Campbell, the founding lawyer of SAC Law, not contacting a lawyer as soon as you’re considering buying or selling is one of the biggest mistakes you can make. Sharie-Ann agreed to chat me with about the importance of working with a real estate lawyer. You might wonder why you never really knew this.
Greg Schryer: What is your role/what do you do when you work with a homebuyer?
Sharie-Ann Campbell: When working with a homebuyer, my primary role is to ensure my client gets good title[i]. My aim is to get my client title that is free and clear from any past or future encumbrances[ii]. I accomplish this by searching the title itself, and I also do off-title searches. For clarity:
- -On-title searches include searching all past transfers of title, any mortgages (previous or existing)
- -Off-title searches include things that could potentially lead to someone having a lien against title (ex. if there is a judgment against a seller, or a construction lien)
When working with first time homebuyers, there is usually a mortgage involved. Where a buyer is granting a mortgage on property, the mortgage company is also my client and I am responsible for protecting their interests as well.
On top of making sure the buyer gets good title, I also have to satisfy the mortgage company. Their major concern is protecting their investment and they do this in two major ways: with fire insurance, and with title insurance.
GS: What is your role/what do you do when you work with a home seller?
SAC: When I work with a seller, my major role is to protect my client’s interests by ensuring they fulfill only what they promised to do under the APS (Agreement of Purchase and Sale). I respond to the buyer’s lawyer’s inquiries and provide them with the appropriate affidavits and information, which do NOT go beyond what was promised in the APS—this protects my client from any future litigation.
It’s important to note that in every real estate transaction, the lawyer’s role is to transfer title. Only a lawyer may do this.
GS: What are most common mistakes people make when buying and selling property?
SAC: I’d have to say the most common mistake when buying or selling property is not contacting your lawyer sooner! Buyers and sellers both lose a lot of potential value by not contacting a lawyer earlier in a transaction. Buying and selling property is a significant investment and there may be other factors to consider, such as your family arrangement (ex: common law v. legally married), source of the down payment funds (ex: from an inheritance), or just sitting down to better understand what the buy/sell process involves and what rebates might be available (ex: land transfer tax for first time homebuyers).
GS: Are lawyer’s fees expensive?
SAC: Lawyer’s fees can be a shock for some people, but they reflect the weeks of work that go into your file before your closing date. A lawyer’s bill will normally be separated by fees and disbursements. Fees are what is charged by a lawyer to do the transaction, and disbursements are the actual costs that are incurred on a file such as paying couriers, certifying cheques, and registration fees to transfer title or register a mortgage.
The final bill on a purchase is usually higher than the final bill on a sale because there is more work that goes into doing all the searches mentioned above, and the disbursements are higher because the searches also cost money to obtain. You can discuss fees upfront with your lawyer prior to working on your sale.
GS: When should someone engage with legal help when buying or selling property?
SAC: You should consider engaging legal help as soon as you consider buying or selling a property—every time. Choose a lawyer who you can meet with in advance and ask any questions you might have. Often buyers and sellers approach a transaction with simply buying or selling in mind and might not realize the transactions might have implications under the Family Law Act, for example. Allow your lawyer to be your greatest resource.
I think Sharie-Ann said it best—allow your lawyer to be your greatest resource! Don’t make the common mistake of seeking legal counsel too late in the home buying or selling process. Partnering with a real estate lawyer should be one of the first steps you take to get more value from your home. Since it’s likely one of the biggest investments you’ll ever make, you want to be sure that you understand the home buying and selling process, that you’re aware of all the implications, and that you know what rebates might be available to you. Leveraging the expertise of a professional like Sharie-Ann can make a huge difference.
[i] In property law, a title is a bundle of rights in a piece of property in which a party may own either a legal interest or equitable interest. It also refers to a formal document, such as a deed, that serves as evidence of ownership.
[ii] An encumbrance is a claim or liability against real estate, held by someone other than the fee owner of the property that affects the title to the property, and therefore its value.