Author: admin

Title search. What is it and why do you need it.

Before we explain what a title search is, it is important to understand what title means.

Title is a legal term that means registered owner of a property.  Records associated with the title of a particular property are usually kept in a land registry office, which is responsible for record keeping.  These records include deeds, court records, property and name indexes, and other documents related to the property.

Before you purchase a property, your lawyer conducts a title search to examine the property’s title history and ensure that the seller has the legal right to sell the property, and that there are no other encumbrances (such as liens, title claims, judgements, mortgages etc.) or property line issues that could prevent the buyer from taking full possession.

What does a title search show?

A title search clarifies the legal owner(s) of the property, any existing easements, leases, or restrictions that affect the property, any mortgages, judgements against the property, liens, or unpaid rental contracts (such as hot water tanks) that will need to be dealt with before the property can be sold to a buyer.

What if there are issues found with the title?

If title issues arise with the property you are purchasing, your lawyer will work with your seller’s lawyer to try to resolve.  Often times, issues can be corrected prior to closing

What if there are issues found with the title?

If title issues arise with the property you are purchasing, your lawyer will work with your seller’s lawyer to try to resolve.  Often times, issues can be corrected prior to closing

What if a title issue is discovered after closing?

In case an issue is discovered on your title after you have closed your transaction, title insurance covers several situations and is meant to protect you against the unforeseen.   For more information on title insurance, click here.

How much is a title search?

Our transparent fees include a title search for purchases and refinances of properties.  Depending on the extent of the searches required, you may incur some disbursements for service fees incurred for the searching the land registry.

I’m refinancing, why do I need a title search?

Your lender will likely require a new title search as a condition of refinancing.  Lenders typically will need to see if there are any issues standing in the way of your property being fit to sell when approving refinancing transactions.  

Online Real Estate and Mortgage Closings

We created Deeded to bring simplicity and accessibility to one of life’s most important transactions.

Our vision is to bring the entire closing process online, making it transparent, convenient and human.  It is something we felt strongly was needed to meet the demands of the modern consumer and compliment the ongoing digitization of the Real Estate transaction.

Little did we know that only a few short weeks after launching, our vision would quickly become the reality by which Real Estate and mortgage transactions are closed.   The crisis caused by COVID-19 has sent the entire industry into a tailspin where new practices had to be adopted literally overnight in order to accommodate a new reality.

In the past two weeks we’ve seen regulations change, significant support from the title insurers and a resilient industry come together and innovate in order to get current and future transactions closed.

This is where our technology, streamlined processes, and team shine.  Preparation always meets opportunity.  We were built for a digital age.  We’ve invested in a future that turned out to be now.  It’s why we feel so prepared to serve you during these difficult times and beyond.  

Deeded offers a fully online closing experience, making purchases, sales and refinances smooth and seamless.  

There are 4 easy steps to get your deal closed by Deeded.  

Upload Documents

Securely upload required documents and complete a brief online intake and ID verification process.   The entire process takes under 10 minutes.

Attend a Video Signing

We’ll schedule a video signing meeting at a convenient time for you (including evenings and weekends).   All you need is a computer with a webcam, an internet connection and a smartphone.   There’s no printing, scanning or couriers required.  

Electronic Funds Transfer

On a purchase we will ask that you direct deposit the funds into our account. On a sale we will wire the funds into your account after closing.

Keys at the Property

On a purchase we’ll arrange for your sellers to leave the keys in a lockbox at the property. On a sale, simply leave your keys in a lockbox at the property.

To get started or obtain a quote, please click here.

How do Video Closings for Real Estate and Mortgages Work?

Virtual video closings keep Real Estate and Mortgage transactions flowing during the COVID-19 pandemic.

As the coronavirus (COVID-19) continues to spread, it has become challenging to close a real estate transaction, especially for those thousands of buyers and sellers who are planning to close their transactions over the next few weeks or even months.

The closing process requires documents to be signed and commissioned in front of a lawyer or a commissioner of oaths, which presents an issue when people are quarantined, stuck abroad due to travel restrictions, or simply cannot travel to the lawyer’s office due to quarantine or closure of the office.

As of March 16, 2020, the Law Society of Ontario has issued a special bulletin to allow remote commissioning of documents as a special measure to deal with the disruption caused by COVID-19.  In addition, title insurers and some lenders have indicated flexibility given the situation.

Deeded has invested in virtual signing technology that allows clients to securely sign their documents from the comfort of their home.  All they need is a computer, an internet connection, and a smart phone.   There’s no need to print, courier or scan documents.

This technology allows us to securely present documents, have them signed and witnesses in real-time, and record the entire interaction for security purposes.

How do Virtual Signings work?

Step 1 – Scheduling the signing appointment

Clients will receive a calendar meeting invite with a link.   The session takes place live and can be scheduled at a convenient time.   All individuals who are signing need to attend, but they do not have to be at the same location. 

Step 2 – The virtual signing

All parties will be able to see each other on a live video stream.  The lawyer will explain the entire process and will ask each signer to identify themselves and show photo ID.  Clients will

Each document to be signed is presented on the screen, explained, and is signed on the screen by each party.  If the client does not have a touch-screen device, a SMS or email can be sent to their mobile device and they can sign on the surface of their mobile device using their finger or stylus.

The lawyer or commissioner will also sign where applicable.

Step 3 – Security protocols

Throughout the meeting, the audio and video of the conference is recorded along with the documents being signed.  A secure audit log is used to confirm items such as the signer’s location and identification.   The video is stored on servers offering bank-grade security.

Step 4 – Final documents distributed

As soon as the meeting is complete and parties sign off, the final electronic version of all signed documents is distributed securely for everyone’s records.  

Preparing for your Virtual Signing Appointment

Make sure you have your laptop, tablet and mobile phone ready and that you have a high-speed internet connection.

Have all signing parties bring picture ID to the Virtual Signing appointment

Ensure all parties signing have the calendar invite and meeting link

Log into the Virtual Signing session on the scheduled time

Ensure only those parties who are signing are in the room, or if there is someone else in the room, that person’s identity would be noted, and possibly they would be asked to leave the room

Realtors: Closing your transactions amidst the COVID-19 pandemic

Will COVID-19 impact closing your Real Estate transactions?

A hotter than ever spring housing market coupled with a reduction in mortgage rates is responsible for record-breaking numbers of Real Estate transactions in markets across Ontario.

As the coronavirus (COVID-19) continues to spread, it may soon become a reality that your clients and perhaps you will face a quarantine much like we’ve already seen occur in China, Italy, Iran and other countries.

This may present unexpected challenges in closing your Real Estate transactions that may impact your clients and your business. Here are the most common questions we’ve received along with potential contingency plans to minimize disruption to your business and your client’s lives.

For firm deals, are clients obligated to close?

Most firm residential real estate transactions in Ontario require the buyer or seller to close the transaction by a specific date as set out in the Agreement of Purchase and Sale (APS). 

Most residential transactions do not usually include a force majeure clause that typically excuses a party from performance if the failure to perform is due to an event beyond the party’s control.

Therefore, in most cases, clients will still be obligated to close their transaction despite any challenges that may be beyond their control.

For any deals moving forward, consider including a COVID-19 delay clause to protect you and your clients from a delay that is caused directly by COVID-19 disruption (such as a quarantine). This clause should be written and reviewed by a lawyer as it will need to be specific, clear and enforceable.

Can closings be delayed as a result of COVID-19?

Closing can be delayed if an amendment to the agreement of purchase and sale (APS) is signed and agreed upon by all parties.  If you or your clients foresee the need to postpone or change your closing date, the sooner amendments can be signed by both parties, the better. 

Given the uncertainly, it is important to proactively communicate with your clients, lawyer, and the co-operating agent to ensure the closing is proceeding as scheduled.  Knowing the flexibility of your buyers and sellers can make a big difference in putting together potential amendments.

What if clients cannot make it to sign closing documents?

To close the transaction, your clients will have to attend a lawyer’s office to sign closing documents.  Some lawyers may offer at-home signing, which may not work in the case of a full quarantine.

At Deeded, we have started to leverage remote signing and ID verification technology to allow clients to sign documents via video conference from the comfort of their home.  This service is available to qualified clients. Please reach out to us at hello@deeded.ca if we can help with your closing.

What if lenders are disrupted by Coronavirus?

Most employers are taking serious measures to protect their employees and prevent further spread of the virus in the workplace. As such, lending operations may face delays and logjams caused by shortages of staff.

Mortgage instructions from the lender are required to close a deal that requires financing and a delay in getting mortgage instructions may mean a delay in closing. It is best to be proactive, working with your partners on the deal to ensure that:

  1. Clients sign mortgage commitments – Some lenders may offer remote options to sign paperwork.
  2. Mortgage instructions are sent to the lawyer’s office at least 2-3 days prior to closing

What if the land registry closes down?

Most title insurance policies include Gap Coverage that insures both purchasers and lenders against losses due to intervening registrations on title between the date of closing and the date of registration.

This means that in the event that online registration is no longer available, or land registry offices experience delays or closures due to COVID-19, transactions can close on time and funds and keys can be released to the respective parties.

What if my brokerage is closed?

Some brokerages have advised agents to work from home and may take additional steps to close their office during the pandemic and have deal staff working from home. This may impact your ability to take deposit cheques and collect commission cheques in a timely manner.

For deposits, you can ask that it be wired or directly deposited into your brokerage’s trust account instead of taking deposits as cheques. Payment for commissions can also be wired/transferred from the lawyer’s office to the brokerage and if your broker is already setup to transfer commissions into your bank account, this can avoid any delays and potentially disrupting your cash flow.

What else should I consider?

The escalating situation with the spread of COVID-19 may impact other parts of your transaction such as your lawyers, mortgage brokers, stagers and other key resources.  It is more important than ever to proactively communicate with your partners and develop a contingency plan. 

Important note: This article is not Legal Advice.  Please consult with your lawyer for specific information or any advice related to your specific case.  No one should act, or refrain from acting, based solely upon the materials provided on this website, any hypertext links or other general information without first seeking appropriate legal or other professional advice.

COVID-19 and Residential Real Estate Closings – What you need to know.

Will COVID-19 impact residential Real Estate closings?

As the disruption caused by coronavirus (COVID-19) continues to spread, it may become increasingly essential to quarantine a large portion of the population to counter the spread of the virus as we’ve already seen happen in China, Italy, Iran and other countries.

Given that we are in the midst of a very busy spring market, closing residential real estate transactions may face unexpected challenges that may cause ripple effects for buyers and sellers. 

These challenges can range from not being able to attend a lawyer’s office to sign documents to disruption for professionals such as appraisers, lawyers and lenders.

Am I still obligated to close?

Most residential real estate transactions in Ontario require the buyer or seller to close the transaction by a specific date.  Contrary to some commercial real estate contracts, residential transactions do not usually include a force majeure clause that could potentially excuse a party from performance if the failure to perform is due to an event beyond the party’s control.

Therefore, in most cases, you will still be obligated to close your transaction despite any circumstances.  

If you are considering buying or selling a home in the near future, a specific COVID-19 clause can be included in your agreement to allow for potential delays cause by potential disruption to lenders or the land registry.

Can closing be delayed as a result of quarantine?

Closing can be delayed if an amendment to the agreement of purchase and sale (APS) is signed and agreed upon by all parties.  If you foresee the need to postpone or change your closing date, the sooner amendments can be signed by both parties, the better.

What if I cannot make it to sign documents?

To close your transaction, you will have to attend a lawyer’s office to sign your closing documents.  Some lawyers may offer at-home signing, which may not work in the case of a full quarantine.  

At Deeded, we have implemented advanced video signing technology to allow you to sign closing documents from home. We will make this option available for free for qualified clients. Please contact us at hello@deeded.ca if we can help.

What if the land registry closes down?

Most title insurance policies include Gap Coverage that insures both purchasers and lenders against losses due to intervening registrations on title between the date of closing and the date of registration.

This means that in the event that online registration is no longer available, or land registry offices experience delays or closures due to COVID-19, transactions can close on time and funds and keys can be released to the respective parties.

What else should I consider?

The escalating situation with the spread of COVID-19 may impact other parts of your transaction such as your movers, utility companies or your condo property management. 

It is best to be proactive in planning your closing and contacting the various parties involved to ensure contingency plans are in place should the closing be impacted by the COVID-19 disruption.

Important note: This article is not Legal Advice.  Please consult with your lawyer for specific information or any advice related to your specific case.  No one should act, or refrain from acting, based solely upon the materials provided on this website, any hypertext links or other general information without first seeking appropriate legal or other professional advice.

Reimagining the Home Closing Experience

Reimagining the closing experience

A long conversation over lunch sparked what later became Deeded.  

I had recently closed on a new home and was still shaking my head after being charged thousands in fees I did not anticipate.  My co-founder’s closing went a much smoother, but his excitement of buying his first home quickly shifted into misery when he spent 4 hours in traffic going to the lawyer’s office to pick up the keys for his new home.

After speaking with dozens of recent home buyers and sellers, we quickly learned that our home closing experiences weren’t just isolated cases. The most anticipated part of every real estate transaction was being done with it, yet the closing is, by nature, the most complicated and slowest part of the proceedings. A good closing experience was defined by consumers we spoke with as “uneventful” as opposed to the exciting, happy and memorable moment – as it should be.

So, what do a couple of crazy entrepreneurs decide to do?  We decided to build a company can deliver the closing experience that we wished we had. 

We spent weeks summarizing all the feedback we heard from consumers and speaking to dozens more, including lawyers and top industry executives.  We noted and prioritized common pain points and spent a few more weeks trying to come up with solutions to each pain point.

While it is still way early to declare victory or claim we’ve solved anything, we couldn’t be prouder of of the foundation we’ve built. 

“Closing is like a black box – you never know what’s going on”

By far, the top concern we heard from home buyers and sellers was a lack of communication and transparency during the closing process.  Many claimed the process shut them out and kept them waiting.  Consumers didn’t know if any work was being done on their deal.  They were clueless as to what is expected of them or if any issues arose during closing. 

In some professions not hearing anything can mean good news (think your doctor, after your physical).  However, for those who are in the midst of the most significant transaction they’d ever make, not hearing is a cause for stress and anxiety.

Today’s real estate customer has an amazing number of tools at hand to make the process easier and faster for them.  They can search for home online, compare prices or review amazing virtual tours. Outside of Real Estate, we can track our Uber, Pizza delivery or Amazon order by the minute.  Yet when it comes to closing their real estate transaction, as one of our interviewees called it, it is often a “black box”.

Building a transparent closing experience

We built a technology platform that lets everyone involved in the transaction stay on top of all the steps involved and always know what’s next. 

Closing a Real Estate transaction involves collaboration between several professionals – each with an important role to play.  Through each step, the client and professionals helping them (such as their Realtor, mortgage broker or lender)  receive real-time notifications and can even log into a personalized portal to see details that are relevant to their role in the deal.

Everyone involved in the deal knows the exact progress (in real-time) and there’s never a question as to what’s next. With every step intuitively laid out for clients, their stress levels subside and they feel engaged in the closing process.

Our goal is that you’ll never feel like your transaction is in a “black box”.  Instead, an open and transparent experience engages the home buyer or seller and guides them throughout the entire process.

The Deeded dashboard keeps everyone in the deal up-to-date.

“I saw the bill and was just speechless”

We know that buying or selling a home is an expensive proposition.  In fact, according to a CBC article, Real estate commissions, land transfer taxes, legal costs and fees for inspecting and surveying homes make up almost two per cent of Canada’s economy. Fees can add up to tens of thousands of a home owner’s hard-earned dollars. 

Now imagine walking into a Starbucks, ordering your drink, and when you get to the cash register, they tell you it’s going to be $200.  I know that sounds absurd, but without understanding exactly what you’re on the hook for in terms of legal fees and disbursements, you’re just asking to be shocked!  

Numerous buyers and sellers we spoke with experienced some degree of “sticker shock” when they finally saw their legal bills at closing.  While many firms and the Law Society of Ontario have made strides to standardize the way prices are advertised for Real Estate closings, consumers still find pricing confusing.

Some law firms advertise very low legal fees to entice consumers, but those fees may exclude services that almost every transaction requires such as registering or discharging a mortgage.  Since an everyday homebuyer is unaccustomed to the ins and outs of real estate purchases, consumers often don’t know what they need included in their legal services. Extra fees can easily add up at closing, leaving consumers surprised and sometimes shocked.

Pricing you can understand and anticipate

We felt that consumers deserve transparency and understand what they are going to pay for closing their deal. 

We published our pricing calculator on our website.  It tells you exactly what will be included in your fees and what to anticipate as charges. 

We also know not every deal will require the same amount of time (and hence costs), so we committed to letting consumers know of any anticipated additional costs the moment we know.   

“I’m self-employed.  Taking a day off work means no income for the day”

Almost every Real Estate transaction ends with a signing appointment.  This is the time where you will meet with your real estate lawyer and sign the required documents to make your purchase, sale or refinance transaction official.

Between work, family, travel and hobbies, we all lead busy lives.   We heard many examples where buyers and their spouse needed to take time off work and commute to the lawyer’s office during business hours to sign their deal.  One couple had travelled 150km each way to meet with their lawyer.  The ordeal took an entire day and cost them thousands in lost wages.

Our at-home signing is a standard part of our service.  This means you can sign when you want and where you want, including evenings and weekends.

We come to you

Just as entire industries are being transformed by the next generation of services that are built around the convenience of consumers (think Uber Eats, Amazon or Instacart), we felt that no consumer in this day and age should ever have to be inconvenienced to close their Real Estate transaction.

Technology and new legislation will soon make it possible to close a transaction over video conferencing, but for the time being, having an agent visit your home or office as a great alternative.

At Deeded, free at-home signing is a standard part of our service.  This means you can sign when you want and where you want, including evenings and weekends.

“I left a voicemail, and another one 2 hours later… crickets!”

One of the Realtors we spoke with described how their client, a first-time buyer nearly ended up in the hospital right before closing.  They had received news of a delay from their bank and were trying to reach their lawyer…for two days!  As the stress levels rose, the health of the client got the worst of them to the point their could not easily breath.

Without any ill intent, their lawyer and his staff were so busy that they didn’t have time to check voicemails and return calls.

The chef never picks up the phone, the host(ess) does

We know and appreciate that things can get very busy.  There’s a reason why when you call a restaurant, the chef doesn’t pick up the phone – the host or hostess does.

Our dedicated home closing advisors serve as the front line for clients and industry professionals.   Their job is to proactively reach out to clients, respond to any inquiries, and most importantly, be the critical conduit that can escalate matters to the lawyers and staff. 

We also know that deals rarely get done during business hours. Offers are often negotiated on evenings and weekend and questions can arise at any time. That’s why we’ve made our team available on evenings and weekends and they are reachable by phone, text or email.

At Deeded, we are on a mission to build a seamless, transparent and human closing experience.  However, we feel like we are just scratching the surface.

For us, everything starts from the experience we’d like to achieve for our clients – the same experience we wished we had when we closed our last home.

Legal Documents – What You’ll Need to Sign at Your Home Closing

Before your transaction closes, you’ll meet with your Real Estate Lawyer at a signing appointment to review and sign your closing documents.  This is the time when you’ll sign the required documents to make your purchase, sale or refinance transaction official.

The excitement of getting to the finish line tends to make us all a little impatient or uninterested in the fine-print legal details.  While your real estate lawyer will explain the purpose of each document and what it means in plain English, we put together some further insight into what to expect when you are at the signing table. 

CHARGE (A FANCY NAME FOR A MORTGAGE)

If you are taking out a mortgage to buy your new home,  the Charge/Mortgage is the document registered against your home in the Ontario land titles registry.  

When reviewing the Charge/Mortgage, you may notice in the “Chargor(s)” section reference to whether or not you are a spouse. The reason for spousal information being includes, even if they might not be on title of the property is because a spouse must provide his/her consent to the mortgage.

CONSENT TO ALSO ACT FOR YOUR BANK

When your transaction involves a mortgage, your lawyer will generally act for both you and your mortgage lender (or lenders in some cases) to save you the cost of paying for two lawyers.

While this isn’t the norm to the rules in most other legal transactions, where each side retains their own representation, an exception to the rule permits a lawyer to act for both parties only if he/she is given permission from both parties to do so.  

When signing legal documents for the purchase of your new home, you may come across a document called “Consent to Act…”.  By signing this document, you give your lawyer permission to act for both you and your bank.

ACKNOWLEDGMENTS AND DIRECTIONS

Acknowledgments and directions are documents signed by you and used by your lawyer as written confirmation that you have reviewed certain documents and that the information is accurate. A direction states that you authorize and direct your lawyer to take certain action. Your lawyer may require you to review and sign an acknowledgment and direction before your mortgage or the transfer of title is registered. Your lawyer may also require you to review and sign a direction for the transfer of funds from your bank to be held in trust by him/her until the amount is paid to the home seller.

TRANSFER OF TITLE

The Transfer of Title is a document that is registered with the Ontario land titles registry.  In a nutshell, this document directs the transfer of interest in the home.

JOINT TENANTS OR TENANTS IN COMMON

If you’re buying your home with other people such as a family member or a spouse, you may be asked if you’d like to be registered as “Joint Tenants” or “Tenants in Common”.

With joint tenancy, you co-own 100% of the home with the other people on title and no one person owns a specific share of the home. For example, spouses may purchase a home together as joint tenants because, in the event that one of the spouses passes away, 100% of the ownership of the home then automatically belongs to the surviving spouse.  

On the other hand, with tenancy in common, you own a specified share of the home and may be able to transfer or sell that share to others. Upon death, the share of the home will pass to the tenant in common’s heirs.  Often times in co-ownership or investment properties the owners are considered tenants in common.

STATEMENT OF ADJUSTMENTS

The statement of adjustments likely gets the most questions during the signing appointment.  Put simply, a statement of adjustments summarizes the monies that will be exchanged, less any adjustments (deductions in the favor of the buyer or seller). 

The statement of adjustments is similar to your monthly bank statement, as it has a list of various debits and credits with a balance at the end. In the buyer’s statement of adjustments, the debits represent amounts already paid, such as the deposit, while the credits include the purchase price of the home and any fees or utilities the seller has prepaid. The total amount in the credits column (purchase price + prepaid items) minus what’s in the debit column (the deposit) is what you owe to the seller on closing day.

If you are buying a home, you’ll likely see your purchase price, plus any additional fees, less any deposits you’ve put down and funds that are coming in from your lender.  The balance of the statement is what you’ll need to pay at closing.

If you are selling your home, you’ll see items such as proceeds from your sale, property tax adjustments, deductions for real estate commissions, and a payout to your mortgage lender, as applicable.

The more you know, the smoother your transaction will.  Now that you have a better idea of what documents to expect at your signing appointment, taking a few minutes to prepare questions or ask for clarifications is always a good idea.

At Deeded, we’re committed to making your Real Estate transaction seamless and smooth.  We believe that consumers should be empowered and in control of the most significant purchase or sale they’ll likely make. 

Important note: This article is not Legal Advice.  No one should act, or refrain from acting, based solely upon the materials provided on this website, any hypertext links or other general information without first seeking appropriate legal or other professional advice.

7 Questions to Ask a Lawyer When Buying a Home or Condo

Congratulations on buying or selling your home.  

If you just firmed up your purchase or sale (congrats!), you’ll likely need to choose a Real Estate lawyer to facilitate your closing.  

No matter which lawyer you choose, asking the right questions before moving forward with having the lawyer (or law firm) who is going to handle your transaction can make the entire experience smoother and more predictable. 

Here are some questions you should ask a lawyer when buying or selling a house or condo:

HOW LONG HAVE YOU BEEN PRACTICING?

Before hiring a real estate lawyer, it can be crucial to find out how much experience they have in the industry handling residential real estate transactions.  

A good question to ask is how many transactions they have closed in the course of their practice.

Although, it is not always necessary to find a seasoned professional with decades of legal work on their resume, finding a fairly experienced lawyer is extremely valuable.  Like any specialists, Real Estate lawyers who exclusively practice in Real Estate are more likely to have a wealth of knowledge and experience that will help with your transaction in comparison to someone who may be practicing in other legal disciplines. 

WHAT DO YOUR CLOSING FEES INCLUDE?

Upon closing, the last thing you want is to be surprised at additional/unexpected closing costs. In addition to legal fees, there can be additional closing costs such as for title insurance, land transfer tax, disbursements and government fees. 

While sometimes circumstances may lead to additional charges, make sure you know what your lawyer will charge you for legal fees and what they expect to charge on top of legal fees.  

Things can get confusing as some lawyers may offer fixed fees which combine legal fees, disbursements and other charges into one overall bill, while some may advertise or quote their legal fees and will add additional fees and disbursements.  It is therefore important to ask and understand what an estimated final bill will look like, after legal fees, disbursements and government charges.

While buying a home has most people strapped for cash as expenses can rack up quickly, the lowest price lawyer isn’t always the best choice.   What may look initially as saving a few hundred bucks can easily turn into thousands in potential additional costs if parts of the transaction aren’t done right.  Make sure to hire a professional who you feel comfortable with.

Deeded offers transparent pricing so that you know exactly what is included in your legal fees and what to expect in terms of additional fees or disbursements.

WHAT SHOULD I EXPECT IN TERMS OF PROCESS?

Buying or selling a home is a major transaction.  It is important to understand the closing process, especially when your lawyer’s office will be in contact, what information or documents they might need from you, and when you should expect to get updates on the progress of your transaction.

Since every lawyer works in a slightly different manner, it is important to clarify and understand your role in the process in order to ensure a smooth closing.

WHAT IS MY TITLE INSURANCE PREMIUM?

Most purchase, sale and refinancing real estate transactions will include a title insurance policy in order to protect you and your lender from an array of issues that can occur after closing.  

Title insurance costs vary depending on the price, location and type of property you are purchasing or refinancing and can range from a few hundred dollars to a few thousand,  so knowing what to budget in additional costs can save you from surprises down the road.  

Our calculator estimates your title insurance premiums, but rates can vary greatly so please check with your lawyer to ensure you are getting the most accurate premiums for your transaction.

HOW MUCH LAND TRANSFER TAX WILL I PAY?

Land transfer tax applies if you’re purchasing a property.  The amount of taxes paid can be significant and vary depending on the price of your property, what municipality it is located in, and whether you’re eligible for rebates such as a first-time buyer rebate.   

Land transfer taxes can be the most significant part of your closing costs, so it is important to know what to expect up-front.   

Our land transfer tax calculator can estimate what you’ll be expected to pay, but it is important to verify any details with your lawyer and see if you’re eligible for any rebates.

ARE THERE TAX IMPLICATIONS FOR MY TRANSACTION?

While your Real Estate lawyer likely doesn’t provide tax advice, your real estate transaction may trigger tax implications such as HST payable on a new construction home or an investment property, all the way to income taxes or capital gains taxes in certain cases.  There are also situations where you may be eligible for certain tax rebates to offset taxes payable.

Nobody likes to be slapped with an unexpected tax bill or even worse, a re-assessment, so understanding what your transaction may trigger may be a question you’d want to ask your real estate lawyer or accountant.

WHEN AND WHERE WILL SIGNING TAKE PLACE?

Signing typically refers to having a meeting with your lawyer to sign the requirement documents for your Real Estate transaction.  Signing typically takes place a few days prior to closing and may involve all registered owners (whether you’re buying or selling), attending the signing appointment.

Because life gets busy with work, travel and the occasional vacation, it is important to know when and where you’re signing will take place.  If you won’t be in town or have other commitments that prevent you and other registered owners from attending a signing appointment (usually during business hours), your closing may be delayed.

Deeded offers at-home signing appointments as part of our service.  This means we come to your home at a convenient time (including evenings and weekends) so you don’t have to take time off work or travel to a lawyer’s office to attend your signing appointment.

In summary, choosing your Real Estate lawyer with care and asking the right questions up-front can prepare you for a smoother home closing, reducing surprises, and get you into your home faster.

Important note: This article is not Legal Advice.  No one should act, or refrain from acting, based solely upon the materials provided on this website, any hypertext links or other general information without first seeking appropriate legal or other professional advice.

Refinancing – What is it and what’s the process?

Refinancing – What is it and what’s the process?

Mortgage refinancing is the process of paying off an existing loan and replacing it with a new loan with different terms than your original mortgage.

There are many reasons why home owners choose to refinance a mortgage. The most popular reasons being converting from a variable rate mortgage to a fixed rate one (or vice-versa in some cases), consolidating debt from higher interest loans or credit cards or accessing some of the equity in the home to finance larger purchases such as renovations, a new vehicle, or a down payment on an investment property. 

Refinancing is often confused for having a second mortgage, but in reality, the two are very different.  A second mortgage is in addition to your first and does not replace it as a refinancing would.  Mortgage refinancing gives the borrower new money that can be used to pay off the original mortgage, ideally with better terms.

Should I refinance?

The decision on whether or not to refinance should be based on your financial goals. For example, if you’re looking to improve your monthly cash flow, take advantage of lower interest rates to reduce your payment or consolidate debt, refinancing may be a viable option.

Unfortunately, every situation is unique so consulting with a mortgage professional who can calculate potential costs, penalties and legal fees for your refinance is always a smart decision before proceeding.

I’ve decided to go ahead.   What’s the process to refinance?

If you decide to take advantage of refinancing, your mortgage professional or current lender will need to process an application, similar to the one you did when you first got your mortgage.

This means you’ll need to be prepared with documents, paperwork, and an appraisal that supports your application.   

  1. Depending on your credit and other variables, your mortgage professional will likely ask for proof of income, such as pay stubs, T4 slips and employment letters.  
  2. You will likely need to have an appraisal done on your property to determine the current value and thus what you’ll be able to borrow.  Your mortgage professional can order an appraisal on your behalf, but you may be on the hook for costs of the appraisal
  3. You’ll need to hire a lawyer to put together required documentation, title insurance and arrange for signing the new mortgage documents.   Deeded can help with your mortgage refinancing and make closing your refinancing a breeze.

How can Deeded help?

When it comes to refinancing your mortgage, our team at Deeded makes the process as easy as possible so you can “close” and access your money quicker.    

Our team helps you understand your obligations, can expedite the process and help you navigate the legal documents that needs to be signed before funds are released to you. 

With Deeded you’ll never need to leave your home to close your mortgage refinancing deal.  We’ll come to your home and office, making it convenient and stress-free.

We also made our fees for refinancing your mortgage clear and transparent so we can avoid surprises at closing and leave more money in your pocket.

Important note: This article is not Legal Advice.  No one should act, or refrain from acting, based solely upon the materials provided on this website, any hypertext links or other general information without first seeking appropriate legal or other professional advice.

Hello New Home, Hello Taxes. Here’s What You Need to Know.

Hello New Home, Hello Taxes. Here’s What You Need to Know.

Buying a home is exciting.  Taxes are not. While this is the topic that everyone loves to ignore, buying or selling a home in Ontario does come with quite a few tax implications.  The more you know about them, the less stressed you’ll be down the road. 

In this blog, we’ll dive into:

  • Land transfer taxes
  • Property taxes
  • HST (Harmonized Sales Tax)
  • Capital gains taxes
  • Income tax implications

Land Transfer Taxes

In Ontario, the buyer is on the hook for a land transfer tax payment that is due on closing.  Given the average property price in your market, this can be a significant amount that you’ll need to plan for.  Here’s how it’s calculated.

Ontario Land Transfer Tax:

  • 0.5% of the value of the property up to and including $55,000
  • 1% of the value which exceeds $55,000 up to and including $250,000
  • 1.5% of the value which exceeds $250,000 up to and including $400,000
  • 2% of the value between $400,000 and $2,000,000
  • 2.5% for amounts exceeding $2,000,000, where the land contains one or two single family residences

If you’re buying in the city of Toronto, you’ll also be paying a second land transfer tax .

Toronto Land Transfer Tax

  • 0.5% up to and including the first $55,000
  • 1% of the value which exceeds $55,000 up to and including $250,000
  • 1.5% of the value between $250,000 and $400,000
  • 2% of the value between $400,000 and $2,000,000
  • 2.5% of the value over $2,000,000

Before you start creating excel spreadsheets and dusting off your calculator, our land transfer tax calculator will help you figure out what you will owe. 

If you’re a first time buyer, you’re in luck (pending some conditions, of course,  you may be eligible to receive a refund for all or part of the land-transfer tax – click here for details of the Land Transfer Tax Refund Program.  Our calculator factors in any first-time buyer rebates, so once again, no need for number crunching on your part.

Property Taxes

Your property taxes will vary based on your municipality.  

If your property is in the city of Toronto, you can check how much property taxes are by using the City of Toronto property tax calculator..  Other municipalities may offer similar calculators on their website. 

The amount of your property tax is calculated on the phased-in property assessment value of your property, determined by MPAC (Municipal Property Assessment Corporation). You can read all about how MPAC determines the value of your property here.

MPAC property assessments are usually lower than current market value so if paid $1,000,000 for your house, MPAC’s assessment probably has you paying taxes on a much lower assessed value.

Depending on what you sign up for, property taxes are due in either two instalments (March and July); 6 instalments (March, April, May, July, August and September); or in 11 instalments (due every month except January). 

Increases in property values will impact your property taxes

Do you plan to finish the basement or do a significant renovation, like an addition to your home?  You will likely be re-assessed for tax purposes and your taxes will increase.

New Construction Homes

MPAC usually assesses newly built homes within 6 months.  In the meantime, you may be responsible for paying the taxes on the land value of your property.  The most important thing to remember is that once the MPAC assessment is completed, the city will bill you for property taxes owed from the date of possession.   For most people, it’s a shock when they get their first property tax bill that is a lot larger than what they had expected. A good tip is to always set money aside to cover your first property tax bill.

HST

To say the HST is confusing is an understatement.  Here’s how we boil it down.

Resale Homes

  • HST is NOT payable on resale properties in Ontario
  • If a residential property is used partially as commercial, HST would be payable on the percentage that was used as commercial
  • HST may be payable on a highly renovated home (but rebates may apply)

Vacant Land

  • HST is not payable on vacant land (personal use only)

Newly Constructed Houses and Condos

  • HST applies to new construction homes
  • Federal and provincial rebates are available in some cases
  • Most builders will factor the HST and the HST rebate into the purchase price of the home, though some will not, so if you’re buying pre-construction, make sure to ask and have your lawyer review the agreement.
  • To qualify for the rebate from the builder, the home must be the primary residence of the purchaser or one of their immediate blood-relatives and you’ll be required to submit proof if an audit ever occurs.
  • If you are buying a property as an investor, you don’t qualify for the rebate automatically. Plan to pay the builder the full amount of the HST on closing and you can apply for a rebate after you’ve signed a one-year lease agreement with a tenant.  This basically means that you may be fronting the HST for a few months until the rebate is processed and approved.

Commercial Properties

  • HST is payable on commercial properties

REALTOR Commissions and Legal Fees

  • All REALTOR commissions are subject to HST
  • HST is payable on real estate legal fees

When closing your purchase or sale with Deeded, we apply the appropriate taxes to your closing and can help guide you through complex processes such as filling for an HST tax rebate or refund.

Capital Gains Tax

When you earn money on an investment, you’re subject to a capital gains tax on the amount you’ve profited.  

The good news is that if your home is your principal residence (the home you live in), you won’t have to pay capital gains taxes.  You can only have one principal residence and may be asked to provide proof that you live in the house if audited.

If you’re selling an investment property, even if a part of it has been rented in the past, you may be on the hook for capital gains tax that will be paid on 50% of the gain.  For example, if you bought a condo at $500K, rented it out for a couple of years and later sold it for $750K, you will pay taxes on $125K (50% of the $250K you made, less selling expenses).   

Your taxes will be calculated after the capital gains have been added to your income for the year so if make $100K and followed our example, another $125K in income will be added to your overall income, putting you at a higher tax bracket.

It is important to involve your accountant or financial planner before buying or selling an investment property to account for the tax implications according to the latest rules from the CRA>

Income Tax

If you are flipping your home or if that’s your full-time job, you’ll be taxed on the full income you make between what you bought and sold the property for, less your expenses.

If you’re going to be a landlord and rent your property out, the rents you collect will be added to your income, less expenses that are associated with the rental property (like property taxes, interest on your mortgage, advertising, renovations, etc.)

If you’re in the business of flipping houses, the CRA will want a piece of the action in the form of income tax. If flipping is your main gig or forms a substantial part of your income, the CRA will consider it active income and you’ll be taxed at the usual income tax rates.

Our final take is this.   Taxes can be complicated and every situation is different.  The best you can do is become aware of tax implications and plan ahead for them.   There’s no worse situation than having to come up with an extra $50K at closing because there’s something you missed or were not told along the way.   

It is always worth a brief conversation with your lawyer and accountant before you buy or sell a property to understand your obligations and tax liabilities.  You’d be amazed by how much a 10 minute conversation can save you.

Important note: This article is not Legal Advice.  No one should act, or refrain from acting, based solely upon the materials provided on this website, any hypertext links or other general information without first seeking appropriate legal or other professional advice.