7 Common Questions
for property sellers
Sellers have gone through the process at least once so they should already know how this works, right? Not necessarily. Because selling is the complete opposite of buying there can still be a lot to learn, even for those who have sold before.
1. What expenses should I prepare for?
The good news is that buyers pay for land titles registration costs.
Although sellers do have a legal bill to pay, buyers bearing responsibility for registration costs means that sellers' legal bills are substantially less expensive. Other common expenses are real estate commissions, any penalties or discharge fees associated with sellers' mortgages, and property tax adjustments.
Sellers have property tax adjustments just like buyers. Sometimes those adjustments work in sellers' favour; sometimes, not.
It is advisable to wait on making any tax payments directly to the City unless those payments are made through the Tax Instalment Payment Plan Service (TIPPS) or unless the taxes are due before the possession date. This is because real estate lawyers discuss the tax adjustments and any necessary tax payments with sellers when they meet and voluntary advance payments can unnecessarily complicate the adjustments on the deal.
2. When and how do I hire a lawyer?
Usually, your Real Estate Agent will walk you through it.
In most instances, the real estate agent is going to take care of that initial contact. Once an offer is accepted, the real estate agent will want to know who the seller intends to retain and if the seller does not have a specific lawyer in mind, the real estate agent is a great person to ask for a referral. The seller’s real estate brokerage sends instructions to both lawyers involved in the deal; this will take place very soon after conditions are removed. In those instructions, the lawyer receives all the key pieces of information such as the address of the property, names of the parties, possession date, and purchase price and that enables her to take care of preliminary matters and start working on the transaction.
If there is no realtor because the seller has arranged a private deal, real estate lawyers typically become involved at an earlier stage due to how intimidating the process can be and how parties quickly become aware of the gaps in their own knowledge.
3. Is there tax on that?
Both GST and PST are applicable on all real estate commissions and legal fees, as well as on some disbursements.
Be prepared to pay both the GST and PST on all services related to your real estate transaction.
4. Should I hire a real estate agent or sell privately?
Because the purchase of a home is often the biggest financial investment individuals make, knowing how to maximize that investment when it comes time to sell can cause great concern.
Some believe they will save money by selling privately and that those who are too busy will instead sell through a Real Estate Agent. While private deals do work very well for some people in some circumstances, proceeding without a real estate agent can risk more than spare time and worry.
Selling privately can result in less money realized as net sale proceeds, increased time on the market, and problems in the deals. Sellers must remember that real estate sales involve a complicated process in an emotionally charged environment.
They can benefit their financial well-being and increase their financial security by hiring professionals, such as their real estate agent and real estate lawyer. These professionals can ensure all the fine details are given the attention they deserve, resulting in a successful transaction.
Nevertheless, there are times when private transactions work best and make the most sense for the parties involved. In those situations, real estate lawyers can help the parties involved to work towards a successful closing by assisting with the documentation and providing advice along the way.
5. I accepted an offer... now what?
Real estate agents forward all of the instructions to the real estate lawyers.
This prompts property searches and a file opening shortly after all conditions are removed.
Real estate lawyers then contact the seller for signing, and if they have not done so two weeks before the possession date, sellers should contact their lawyer to ensure instructions were received and everything is on track.
It is wise to keep all utilities in place until the possession date but utility companies will accept advance notice of upcoming cancellations. The utilities can be discontinued early by the sellers if they elect to do so, although most sellers try to avoid the extra cost for the buyers and keep utilities in place until the possession date so service can be transferred to the buyers instead. Insurance should remain on the sale property until the deal closes.
6. Why is my lawyer asking if my boyfriend/girlfriend lives with me?
The Homesteads Act, 1989 applies in Saskatchewan.
While it might sound like something mattering only to the agricultural community, The Homesteads Act, 1989 creates rights in towns and cities too.
The gist of it in relation to the question is this: if a seller has a spouse who has lived in a property the seller owns and the two do not have an inter-spousal contract dealing with the issue, that spouse has homestead rights and the seller must therefore obtain written consent to any sale of that property. A spouse is obviously someone to whom the seller is legally married but also includes someone with whom the seller has lived as spouses for two years or more.
Regardless of sellers' marital situations, documentation as to marital status is required at the time of sale in the form of an affidavit or consent, as the case may be. Real estate lawyers direct sellers in relation to this issue in the normal course of each transaction.
7. When do I have to pay my lawyer?
Your lawyer will usually be paid when you receive the money from your sale.
Legal fees, like most of sellers' closing costs, are typically paid from sale proceeds as long as there will be sufficient proceeds available.