Buying a home in Ontario? Check out the blog to discover 10 legal steps you must follow to ensure a smooth, secure real estate transaction.
Buying a home in Ontario? It’s a major milestone, which is both exciting, and overwhelming at the same time due to the legal hassles involved. There are key legal steps that you cannot skip when you buy a home in Ontario.
At Tamber Law, we specialize in real estate legal services across Ontario. We’re here to help you understand the legal aspects of buying a home so you can make smart, confident decisions every step of the way. In this blog, we’ll walk you through the 10 essential legal steps you must follow when buying a home in Ontario.
Step 1: Get Pre-Approved for a Mortgage
Before you even begin searching for a home in Ontario, it’s very important to get pre-approved for a mortgage. A pre-approval would tell you how much you can afford towards a house and shows sellers that you’re financially serious. It also helps you act quickly in competitive markets like Toronto, Brampton, or Mississauga.
The crucial fact is that; this pre approval avoids legal issues if your financing falls through after signing an Agreement of Purchase and Sale. All you have to do is compare lenders and finding the best interest rates and terms with the guidance of a mortgage broker or bank.
Step 2: Hire an Expert Real Estate Lawyer in Ontario
Hiring a licensed real estate lawyer in Ontario is the next step which is essential to guide you through the legal hurdles of the home buying process. A real estate lawyer will:
- Review your purchase agreement
- Conduct a title search
- Handle the closing documents
- Register the deed in your name
- Ensure all legal deadlines are met
Step 3: Make a Formal Offer (Agreement of Purchase and Sale)
The next step is to make a formal offer, submitting an Agreement of Purchase and Sale (APS). This would act as a legally binding contract between you and the seller. The agreement would outline the purchase price, deposit amount, closing date, and any other conditions like financing or home inspection.
Only if your conditions are not met can you walk away from the deal. On the other hand, backing out could take you to legal and financial penalties. When you hire the lawyer, he would review your APS before finalizing it.
Step 4: Conduct a Title Search
After your offer is accepted, your real estate lawyer will initiate a title search. This is a very crucial legal step that can identify any problems associated with the property title, like unpaid taxes, liens, easements, or claims from other parties.
Title search is important to ensure that the seller legally owns the property and does not hold any legal burdens.
Step 5: Purchase Title Insurance
Purchasing title insurance would be the next step. This step protects you against unexpected issues related to the ownership of the property like fraud, errors in public records, undisclosed heirs, zoning violations, or existing liens.
Most of the Ontario real estate lawyers advise to purchase title insurance before closing. It’s a one-time fee that provides long-term protection and peace of mind to the buyers.
Step 6: Review the Status Certificate (For Condos)
Are you buying a condo? Your lawyer must review the status certificate that includes information about the condo corporation’s financials, legal issues, reserve fund, bylaws, and any special assessments.
The status certificate can reflect all the red flags related to the property like lawsuits, poor management, or unexpected costs.
Step 7: Arrange Home Insurance
Your mortgage lender will demand proof of home insurance before closing to protect the structure and contents of your new home from damage or theft. You must ensure that home insurance is in effect on the closing date. Failing to provide proof of insurance could delay your closing or result in legal penalties.
Normally the policy covers fire, water, theft, and liability coverage. Your lawyer would send proof to the lender before they release mortgage funds.
Step 8: Final Walkthrough and Inspection
A final walkthrough is mandatory before closing. This is your chance to inspect the property and check
- The property is in the same condition as agreed
- Any agreed-upon repairs have been accomplished
- Appliances and fixtures are still in working condition
Something is wrong or missing during the inspection? Notify your lawyer immediately to negotiate with the seller’s lawyer before funds are transferred.
Step 9: Closing Day – Transfer of Ownership
On closing day, your real estate lawyer will handle all the legal and financial tasks to transfer the property into your name. This includes:
- Transfer of funds to the seller
- Registration of the deed and mortgage
- Payment of land transfer tax
- Handing over keys
Step 10: Store All Legal Documents Safely
After closing, your lawyer will provide a final report that includes:
- Registered deed
- Title insurance policy
- Mortgage documents
- Statement of adjustments
You have to keep all these documents safe for future reference, tax purposes, refinancing, and if you decide to sell the property. Tamber Law keeps digital records for your convenience and peace of mind.
Buying a home in Ontario is not just about choosing the right property; it’s also a legal transaction, demanding careful planning, professional guidance, and attention to detail. By following these 10 legal steps discussed above, you can avoid common pitfalls that can lead to delays or disputes. Having a leading real estate lawyer in Ontario by your side will make the process stress-free and secure.