Purchase of a Residential Home
Purchasing a home will be one of the most important events of your life. Ensuring that you have an experienced team that is prepared to guide you through the legal issues and the process is essential. We can assist with:
- Advise on who should own the home, and how
- Prepare the offer to purchase
- Advise on the contents and obligations of the offer to purchase
- Preparing and helping you understandyour mortgage
- Advice and guidance on the costs of buying and borrowing
- Advise on title issues, such as liens, registrations, and title insurance
Shortly before possession date, the purchaser must bring a certified cheque for the balance of the monies owing on the down payment plus the “closing costs” to the lawyer’s office. There are a number of items which are included in the closing costs. The following information is intended to give the purchaser a greater understanding of the additional costs involved in the purchase of a home.
Our fee for a standard residential real estate purchase transaction is: $745.00*
Certain transactions which involve commercial property, condominiums, new homes, farmland or employee relocation may affect our fee and it would be advisable to phone our firm to confirm the fee quote.
*Legal fees do not include taxes and disbursements
These are costs which all purchasers must pay. As a convenience to the purchaser, the lawyer collects these amounts and pays them on behalf of the purchaser.
Land Transfer Tax
This is usually the most significant disbursement.This tax is paid to the Provincial government when you purchase property but not when you sell property.The tax is calculated as a percentage of the purchase price and different percentages are applied to each part of the purchase price.The higher the purchase price, the higher the tax.
The percentages are as follows:
|Under $30,000||No tax|
|$30.000 – $90,000||.5%|
Again, these costs are paid to the Provincial government. To register a new title is $87.00 and to register a new mortgage, if applicable, is $107
Title Insurance and/or Surveryor’s Certificate
Lenders will require a purchaser to obtain either a title insurance policy or a current surveyor’s certificate and zoning memorandum.The cost of a title insurance policy is approximately $300.00.
If a purchaser wishes instead to obtain a surveyor’s certificate from a Manitoba Land Surveyor in lieu of title insurance, the cost to have a survey prepared within Winnipeg is approximately $600.00. The cost for a survey outside the city varies depending on location. If a purchaser opts for a surveyor’s certificate, the lawyer must be notified at least 30 days in advance to allow sufficient time to have the survey completed.
This certificate is provided by the City of Winnipeg or local municipal office and confirms the zoning of the property and whether the structures shown on the Surveyor’s Certificate comply with yard and alignment requirements.The cost is approximately $62.00 for Winnipeg properties.
This certificate is issued by the City or Municipality and is required by most lenders.It indicates whether or not there are unpaid property taxes.The cost is $50.00 for Winnipeg properties.
It would not be advisable to mail large amounts of monies, keys, title documents, mortgages, etc. and therefore couriers are used.A typical transaction will involve 5 to 7 couriers at a total average cost of approximately $50.00.
Title Searches Etc.
There are several costs incurred at the Land Titles Office for the title searches, computer access time, obtaining microfilm copies of documents, etc.Our standard fee of $50.00 covers these typical searches, plus a cost per registration on title.
There are various file costs incurred on behalf of a client including, photocopying, postage, fax charges, file materials, etc.The standard charge for these is $50.00.
GST & RST
GST is payable on the legal fees and most disbursements, but not on the land transfer tax or land title costs. RST is payable on legal fees.
In addition to the closing costs mentioned, there are the following adjustments to the purchase price to take into consideration in determining the final closing costs.
The annual property tax bill may be paid to the municipality by the purchaser, the vendor, or through the municipal tax installment payment plan.The taxes are then adjusted based on each party’s share of the taxes which have been paid or which are to be paid.The tax period is ALWAYS the calendar year from January 1 – December 31, however the due date for payment varies from one municipality to another. In Winnipeg, taxes are due as of June 30, while in rural areas the due date is typically September or October.The required adjustment will be based on the possession date and on whether the taxes have been partially or fully paid.An adjustment is required to credit the party who has paid or will pay more than their proportionate share of the property taxes.
Interest to Vendor (Reserve)
This is often the most confusing part of a purchase transaction. If you are obtaining a new mortgage, the lender will not typically advance mortgage monies until we can verify that title is in your name and the lender’s mortgage is properly registered against your title.Interest under the mortgage will not begin until funds are provided to the lawyer, however the seller will not have received the mortgage funds and is entitled (under the terms of most Offers) to interest from the date of possession until the date they receive all sale funds. When we receive funds from your lender, we courier them to the seller’s lawyer which stops any further interest owing to the vendor. Any excess interest collected is returned to the purchaser as part of the reporting process.
All website content is the property of Tacium Vincent & Associates and may not be used without permission. All information provided is general and is subject to change without notice. For advice specific to your circumstance you should consult a lawyer. Please contact us if you have questions about our services or need the assistance of a lawyer.