Sale of a Residential Home
Sale of a Residential Home
Selling your home can be a stressful event. 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:
– Review of the Agreement of Purchase and Sale
– Obtain and review title
– Obtain property tax information
– Prepare transfer documents and meet with clients to review and execute
– Arrange with buyer’s lawyer for closing arrangement with the lawyer for the buyers
– Handle sales proceeds – this includes paying out title encumbrances, real estate commissions, loans or liens, lawyer fees, and seller proceeds.
Net Sale Proceeds
Net Sale Proceeds is the amount of money which you have in your pocket when the sale transaction is complete.
To calculate the Net Sale Proceeds, take the total sale price for the property and subtract all debts, liens and charges against the property which must be paid as part of the sale transaction and then add back any interest earned on your funds.
Real Estate Commission
Real estate commission is usually a percentage of the selling price plus GST, and this must be paid by the seller’s lawyer upon completion of the transaction.
Our fee for a standard residential real estate sale transaction is:
Sale of Home (including payout of one encumbrance) – $795.00*
Payout and Discharge of additional encumbrances
(mortgage/lien/judgments/etc.) per item $50.00*
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 items are costs which the seller of a house must pay. The lawyer pays these costs on behalf of the seller at the appropriate times. These include the mortgage discharge fee payable to the Land Titles Office, title investigation charges, couriers and other miscellaneous charges all of which generally range between $150.00 – $250.00.
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 the calendar year from January 1 – December 31, but 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 is going to 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 is going to pay more than their proportionate share of the property taxes.
If you have been paying taxes with your mortgage payments, there is going to be an adjustment with your mortgage holder as part of the mortgage payout process. This is because the mortgage holder has been setting aside the tax portion of your mortgage payments in a separate savings account. There is always either some money in the account or else the account is overdrawn. This credit or debit is going to be applied against the balance owing on your mortgage when the mortgage is paid out.
Liens, Judgments & Utilities
If your home has a judgment or a builder’s lien registered against it you have to pay out the lien or judgment and have the registration discharged. Additional legal fees and disbursements apply.
All utilities must be paid up to the date of possession and any home improvement loans through a utility company or government agency need to be paid in full.
If you are purchasing a new home with a possession date which coincides with the possession date for the sale of your home you may need to arrange for interim financing until we can release your sale proceeds. Additional legal fees and disbursements may apply.
A seller earns interest on unpaid sale proceeds until they are received at the seller’s lawyer’s office. The interest rate you earn on these funds is calculated at the purchaser’s mortgage rate.
GST & RST
GST is payable on the real estate commission, legal fees and most disbursements. RST is payable on the legal fees..
We are pleased to provide a FREE CONSULTATION to discuss any questions you may have regarding real estate.
Contact our office at (204) 989-4236 to schedule an appointment.