Lawyers play a critically important role in closing real estate transactions and providing advice to buyers and sellers along the way. At a recent legal seminar presented by Mark Weisleder of realestatelawyers.ca, we got a short update on several new trends in the closing process that are focused on making life simpler for both consumers and realtors.
Some lawyers will now come to you:
There are more than one lawyer around offering mobile services but it is certainly a great option for many buyers and sellers. Having the lawyer (or representative) come to your office or home can be a time saver and very convenient.
Electronic funds transfer:
Lawyers can now do electronic funds transfer more readily in both accepting deposits and closing funds plus disbursing proceeds. Super time saver for all concerned. Saves trips to banks for certified cheques or bank drafts.
In the case of realtors, we receive commission funds immediately upon closing, along with notification that the deal has actually closed. Age old system has relied upon lawyers mailing a commission cheque upon closing and the listing agent brokerage processing that cheque through their own banking network, while also cutting a paper cheque to the co-operating brokerage. Sellers of course, had to make another trip to the lawyers’ office to pick up a cheque for any net proceeds of their sale.
Multi-site closing locations:
Though interaction is minimal on real estate closings (1-2 meetings) many lawyers are now offering closing services in multiple locations across the city (or in the case of realestatelawyers.ca, at 35 locations across the Province)
House Key Management:
A cute and interesting timesaver for buyers and sellers, is that realestatelawyers.ca provides a lockbox to a seller which they install on or before closing day with a set of keys inside. Once the transaction has closed, the sellers’ lawyer provides the lockbox code to the buyer and their lawyer and the buyer can gain immediate access to the property without having to drive to the sellers’ lawyers’ office or other physical location to pick up the keys. The lockbox is gifted to the buyer, thus saving the necessity of a representative returning to the property to retrieve it.
Condo Status documentation package available electronically or on a rush basis:
Condo status certificate review is a critical function of a lawyer on a condo purchase. Property Management companies have 10 days by law to produce these docs for a lawyer representing a buyer at a fee of approximately $100. This is typically quite a pile of legal docs and schedules that have been photocopied numerous times but finally, these are being made available electronically. (although most here in Ottawa still seem to require paper and a physical pick up or courier charge to get these to the buyer’s lawyer.
The 10 day allowable timeline for Property managers to produce the docs (though most are done within 5 business days) does drag out the conditional sales period for a condo sale. This is not advantageous for a seller, as their property is pretty much “off the market” or suspended while awaiting these condo docs. Many property managers will provide an expedited service (24-48 hours) for double the typical fee (ie. Therefore $200) which becomes the buyer expense.
Condo docs good for 90 days:
We think a better idea all around, is for sellers to order the condo Status documentation package at time of listing and make it available to buyers and their agents to review when in advance of making an offer to purchase and thus shortening the need for an extended conditional period. These are normally 5-7 business days for residential properties and 10 business days for condos. Condo status document packages are good for legal purposes for 90 days from date of issue, so as long as closing is within 90 days of the package date, they are very useful.
Having condo docs immediately available greatly facilitates multiple offers. In Toronto, approximately 50% of sellers invest in condo doc package at time of listing, although it is still fairly rare here in Ottawa. Some are doing it but probably less than 5%. This is an idea worth pursuing for anyone selling a condo. Buyers will want to make arrangements with their lawyer to review these docs ahead of making a purchase, as what is contained in those docs may determine whether or how much they wish to offer for the condo.
Fees and Disbursements:
A reminder for both sellers and buyers to be sure to ask for the cost of legal fees (the lawyer fees) and disbursements necessary to process a specific transaction. These fees include land transfer tax, mortgage registration, title insurance, courier fees, govt fees and other services necessary to complete a transaction.
Fees are usually slightly higher for a buyer than a seller. (+$200)
Gord McCormick, Broker of Record
Oasis Realty Brokerage