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Whether you are the buyer or the seller of real estate, it is important that you obtain a lawyer to represent your interests. There are many potential legal pitfalls for the unwary when buying real estate. The agreements for purchase and sale and other related documents are complex. To most people the purchase of a home is the largest investment of their life, and the agreement for purchase and sale is the most important legal contract they will ever sign, next to a will of course!

There are a number of ways to select the right lawyer for your needs:

??? ?Ask friends who have purchased real estate which lawyer they hired, whether they were satisfied, and why or why not.
??? ?Contact the lawyer referral service in your community. Look in the White Pages of the phone book or check online. You can have an initial consultation with a lawyer for free, or for a nominal fee. You will generally be given the names of three lawyers in your community. Make sure you emphasize that you want a lawyer who specializes in real estate.
??? ?Look on the Internet using a Google search, or in the Yellow Pages under “Lawyers” and check the box ads, which outline the areas of expertise. When you call, ask the receptionist which lawyer specializes in real estate. Again, in many cases, initial consultations are free, but be sure to clarify that point before your appointment.

If you are obtaining a mortgage, speak to the lawyer who is preparing the mortgage documents on behalf of the lender. Some lenders permit you to select the lawyer of your choice, while others give you a list of lawyers who are familiar with their mortgage documents and procedures. If the lawyer you choose to transfer the title of your property prepares the mortgage documents, you could save on some duplicated disbursement costs and negotiate a package price.

You want to make certain that the lawyer provides you with a full explanation of the mortgage terms and conditions that might affect your interests. Keep in mind that the mortgage is being prepared on behalf of the lender, but at your expense. If you have any concerns in this area, obtain a separate lawyer to do the non-mortgage legal work, that is, the transfer of title, and explain the contents of the mortgage to you before you sign it. Some lenders will not permit the lawyers they recommend to prepare the mortgage documents to also represent you for the transfer of title.

Prior to a meeting with the lawyer, have all your questions and concerns prepared in writing so that you don’t forget them. Prioritize them in case you run out of time. If you wish to make an offer to purchase, bring your offer-to-purchase document with you, and the details about the new, resale or revenue project you are considering. Ask for a quote of anticipated fee and disbursement costs.

If you are submitting an offer on a weekend and it is not practical to see a lawyer beforehand, you can put a condition in your agreement offer that it is “subject to the review by the purchaser’s lawyer within three business days of acceptance of the offer, with the review being satisfactory to the purchaser”. That is just one example of a clause–your lawyer could suggest different wording. Although the recommendation to have a lawyer review your offer before you have committed yourself is ideal, the reality is that most people ignore it. Attempt to select a lawyer before you have made an offer.

When selecting a lawyer, you should look for various criteria such as qualifications, experience, expertise, compatible personality, confidence and competence in the area concerned. The other issue is the matter of fees, which will be discussed shortly. Having a comparison of at least three lawyers, either through interviews or telephone conversations, is the ideal approach before you make your selection. You need this type of qualitative comparison to enhance your decision-making and increase your knowledge.

Some people just want a lawyer for buying a home to live in, while others want a lawyer on an ongoing basis because they are building a new house, buying various revenue properties, or dealing with a multi-unit dwelling for investment. Still others want a lawyer for litigation purposes. That is, they want to sue someone, or possibly they are being sued. Ideally you want a lawyer who practices at least 50 per cent real estate law. The percentage reflects the amount of interest and commitment the lawyer has to the area of real estate, and the degree of intuitive “street smarts” acquired over time. The quality of legal advice tends to be closely correlated to the duration and percentage of time spent practicing real estate law.

On the issue of fees for legal services, there are various options in the marketplace:

Variable Fee
The amount of the legal fee for your property transfer is based on a sliding scale, increasing as the property purchase price goes up. The same formula applies for the legal services for your mortgage. If a lawyer is providing both of these services, there could be a discount of up to 50 per cent of the mortgage fee, due to efficiency of scale.

Flat Fee
Several lending institutions have arranged a flat-fee legal package with various law firms as an incentive to attract your business. In other words, you would pay a flat fee regardless of the amount of your home purchase or mortgage. Some law firms provide a flat fee as a matter of competitive practice.

Hourly Fee
Depending on the nature of the service provided, you would pay an hourly fee. Based on various factors including the lawyer’s expertise, this could range between $150 and $250 per hour. In addition, most lawyers will give you a quote for a simple property transfer and/or mortgage on the clear understanding that if it turns out to be complex because of unforeseen events or problems, the fee would have to be renegotiated to reflect that additional time reality.

You pay seven per cent GST on the legal fees. Disbursements or out-of-pocket expenses incurred on your behalf are extra, of course, and also include GST. These costs tend to be fairly consistent regardless of who you use. It is only the fee that is negotiable. When you are comparison shopping for legal services, you will see that the marketplace is highly competitive in terms of fees.

Remember the key benefits of using the services of a lawyer for your real estate needs. Only a lawyer can give you legal advice in advance of your purchase to protect your interests, and advise you on your rights, as well as remedies and options if subsequent legal problems occur with the purchase. The professional expertise will provide you with the peace of mind you want and need.


To help your research and save you time and hassle, check out our free checklists and forms on our "Worksheet" section, as well as the stats, surveys, and reports, useful links, etc, on our "Helpful Info" section, both shown on the index on your left.

Copyright © 2021 , Douglas Gray, LL.B. All rights reserved. Any reproduction of the material contained in this website is strictly prohibited. E&OE (Errors and Omissions Excepted). Please refer to Copyright and Disclaimer at bottom of website page. Refer to Books section for related information.


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