THE LAW IN PLAIN ENGLISH: REAL ESTATE

A real estate purchase typically starts with the "Real Estate Purchase Contract" form. This contract is somewhat unique in that it tends to serve as both an offer to purchase, and then if the offer is accepted, automatically becomes the actual contract that outlines the terms of the purchase.

Realtors tend to help people complete these documents and in some cases a lawyer is consulted to ensure each party has completed the contract in a way that ensures their wishes are captured correctly.

If the offer is accepted, it then becomes a valid and binding final contract. Because of this, it is important your realtor and/or lawyer help you understand exactly what it is you will be required by law to do in order to keep up your end of the bargain.

There are numerous examples of cases that went to court because one party thought the chandelier in the dining room was like a sink, tub, or any other light in the house, and was included in the purchase, and the other party took the chandelier with them, treating it like a couch, TV, or floor lamp. Your lawyer and realtor can help you determine how these things are dealt with and ensure that the contract is written so as to protect you.

I remember when my wife and I purchased our first home – we barely had enough money to make it all happen, and so we were shocked to find out there were all kinds of costs associated with purchasing a home that we hadn’t anticipated. Here are some examples of some costs that are typically associated with a real estate deal:

• Mortgaging fees (both from a broker and CMHC): Although a mortgage broker can often take their fee from the lender, there is sometimes a fee associated with this service. In addition, if you are going to be entering into a CMHC mortgage there are fees related to this as well.
• Legal fees and disbursements.
• Property tax adjustments: Because property taxes have often been pre-paid by the seller, the lawyers need to adjust the tax payments to the date of the closing so that each party pays their proportional share for the year.
• Fees to register title and mortgage: Alberta requires ownership of land be registered with land titles.
• Insurance: Before a deal can be completed financial institutions want to know the property is insured in case something happens to it before you re-pay your mortgage.
• Real Property Report: These reports document where the house sits on the land, where your land starts and ends, where any decks sit, and so on.
• Home Inspection: Purchasers often want to have a professional inspector look at the home to make sure there are no major structural problems or other issues the average person may not spot.