Category Archives: Buying a Home

How to Find the Best Real Estate Law Firm | Diamond & Diamond Real Estate Lawyers

How to Find the Best Real Estate Law Firm

Tips on Finding the Best Real Estate Law Firm

When you are planning to purchase a house or a commercial building, the first step is to consult a professional and find the best real estate law firm for your needs.

This is to educate you with all the legal procedures, including your rights and limitations. Hiring a real estate lawyer can give you proper legal counselling regarding your purchase of land and building.

Most realty attorneys offer services that can help you secure your rights and assist you in processing legal documents. Here are some important reminders and tips to help you find the best real estate lawyer:

Starting early is key

Once you have completely decided to buy a house or a lot, start hunting for the best real estate lawyer as well. The more time you have in hand, the more you can prepare for the unexpected.

This will also let you scout several lawyers to choose from in your town. The thing we want to avoid here is choosing a lawyer at the last minute with minimal to zero background research.

Seek advice from other people

The most convenient way to find the best real estate lawyer is through family, friends, or people you know who have recently purchased a house. Ask recommendations from them and, if possible, inquire for cost and procedural matters.

If you have a real estate agent, ask him to refer you to a reputable lawyer. As long as the realty lawyer is independent or in no relation with the agent, then it is a good suggestion.

Do not hesitate to ask them for fees charged by the attorney. You can also ask your acquaintances how well the lawyer navigated them through the entire process of the house purchase.

Search for field expertise

What we are looking for here is a professional who is an expert in the field. If you are purchasing a house, you should find residential or local property lawyers. If you are looking for commercial buildings, seek for a lawyer that handles business land properties.

You may also check online for a list of bar associations to find the the best real estate lawyer for you.

One example is the American Bar Association where you can filter and narrow down your choices into “real estate” to find the top real estate attorneys based on your location.

Do an intense background research

List a few names of lawyers that you believe are good choices. Check their websites and research their past works.

Find out more about their credentials, business styles, field of expertise, office locations, and contact numbers. Hiring a real estate lawyer may require you to pay several visits in their office, so proximity must also be considered.

Prepare for interview

You may conduct an interview with your potential lawyer through phone call or in person. Some lawyers ask for charges for the interview. Ask them about their work experience and how many closing they usually make in a year and their real estate lawyer closing costs.

Do an in-depth interview by asking if they sense a potential conflict of interest in the present deal. You should check if your lawyer is associated with the home builder you are planning to buy a house from.

Do not hesitate to ask for commercial real estate attorney fees. Do they charge by the number of hours or by days?

Some lawyers have fixed fees, while others have a different deal. Look for an attorney that will not burn your pocket.

Read articles about the lawyer

Take some time to read your lawyer’s articles, either written by the lawyer or by other people. Do you think they’re on your good side?

Check for advertisements published online or in print. Do these brochures and promotional ads reflect their work or their business style? If possible, check for real estate lawyer reviews of people who have already worked with the lawyer.

Seal the deal through writing

Once you have decided which lawyer you want to hire, read their retainer agreement or engagement letter. This contains all the services this lawyer and their firm offer. Make sure you understand them completely.

Choosing the best real estate lawyer is just as important as finding the perfect location or design of your house.

Keep in mind that you are going to work with them, so it’s important that you have a good rapport. To find a real estate attorney takes a lot of time, but it saves you from unexpected trouble in the long run.

What is Title Insurance and Why Should I Buy It? | Diamond & Diamond Real Estate Lawyers

What is Title Insurance and Why Should I Buy it?

What Exactly is Title Insurance?

Most people today, when purchasing a home, are unaware of what title insurance is, why they should buy it, and if they do buy it, who they should purchase it from.

This type of insurance is a product offered by your real estate lawyer on behalf of various title insurance companies that protects your ownership interest on a property you are purchasing from losses that may result from unknow title defects at the time of closing.

Why it’s Important

For example, imagine shortly after you bought your home, you found out that there are two outstanding building permits registered against your property that were issued to the person you bought your home from.

You now discover that the renovation work done by the previous owner had major structural flaws relating to the foundation and/or support beams and requires over $140,000.00 of work to correct and close the building permits.

The title insurance you would have purchased with your lawyer is a cost-effective form of protection which would cover any financial costs associated with remedying those issues.

It’s a one-time fee, purchased usually at closing through your lawyer’s office, and continues to cover your purchase for the duration of the time you own the property up until when you sell.

What is Covered under a Title Insurance Policy?

While it always depends on the particular policy itself, title insurance can provide coverage for losses arising from: fraud or false impersonation; existing liens on title; municipal zoning by-law violations; and encroachments onto the property.

When an individual who has purchased this insurance suffers a financial loss from any of these issues, they are able to submit a claim to their insurance company to seek compensation for their loss.

Common Questions

Question 1: Is Title Insurance required on my transaction?

Answer: While it’s not necessarily required on a transaction, the use of title insurance in residential transactions has become extremely common for most purchasers and is now viewed as the market norm.

For a minimal cost of a few hundred dollars, the buyer is receiving coverage ranging from $25,000.00 and up, depending on the insurance company chosen.

Question 2: Do I need title insurance if I’m, getting a mortgage on the property?

Answer: If you are getting a mortgage, it is important to consider what requirements the lender will have on this loan. Most lending institutions, such as RBC, CIBC, TD and Scotia Bank, require title insurance on a property before they will approve a mortgage.

The growing use of title insurance today has resulted in an elimination of certain search requirements for lawyers. However, allowing for savings on time and money for the purchaser.

Question 3: What is not covered under title insurance?

Answer: Title insurance, like any insurance policy, contains exemptions and restrictions of what will be covered. It is important to have a lawyer review the insurance policy to ensure that any searches that are not covered by the policy will be conducted by the lawyer.

Also, it is important for a purchaser to discuss with their lawyer any concerns they may have regarding the property that may affect the use of title insurance.

The purchase of your home will likely be the largest and most important investment you make in your life, and having a qualified lawyer explain to you the protection this type of insurance offers can end up saving you thousands.

Diamond & Diamond Hosts Non-Resident Speculation Tax Seminar | Real Estate Lawyers

Diamond & Diamond Hosts Non-Resident Speculation Tax Seminar

Diamond & Diamond Hosts Seminar About the Non-Resident Tax

Diamond & Diamond Lawyers Avi Top and Isaac Zisckind were proud to host a seminar on the “NRST” (or non-resident speculation tax) foreign buyers tax at Forest Hill Central.

Thank you to all the real estate agents who came out in full force to listen. A special thanks to the Brokers of Record in helping us coordinate this for their team.

An Overview of Real Estate Closing Costs | Diamond & Diamond Real Estate Lawyers

An Overview of Real Estate Closing Costs

Real Estate Closing Costs Overview

Understanding all of the real estate closing costs associated with your transactions can help prepare you more effectively for this final meeting.

It is important to identify an attorney with real estate experience well in advance of moving forward with a real estate transaction.

Your attorney can help review all of the relevant documents associated with this transaction, and guide you through what can sometimes be a complicated process.

Closing costs typically range from between 1.4% to 4.1% of the selling price. These are the administrative and legal costs that you will have to pay during the closing.

In addition to these particular real estate closing costs, there may be other events or legal expenses that require an outlay of cash before, during or after your house closes.

Read on to learn more so you can help prepare for these costs.

Funds Required Before the Mortgage Closes

There are two primary things that you will be responsible for paying before the mortgage closes. These are your deposit and your home inspection fee.

The deposit is something that counts for the down payment and is made when you initiate an offer to purchase. Your deposit may be up to 5% of the purchase price. This is the down payment minimum for a home in Canada.

Make sure you have properly budgeted in advance so that you know what you can afford, not just with regard to the mortgage, but also the closing costs.

Some people entering the process for the first time might not understand all the various real estate closing costs.

A home inspection fee is strongly recommended and can be obtained by contacting a home inspection officer and you may have this a part of your offer to purchase.

A home inspector is responsible for putting together a report about the home’s condition. This will typically cost around $500.

Mortgage Finance Costs

CMHC or mortgage default insurance is typically considered as a closing cost in a purchase of a new home.

This is usually added to your total mortgage and will be amortized over the life of the mortgage.

Mortgage default insurance is required if you get a house with less than 20% down. This helps give the lender some peace of mind that even if you default on the loan, they will be protected.

Home Buyer Mandatory Closing Costs

The home buyer is responsible for incurring a variety of different real estate closing costs, including:

  • Title insurance that typically ranges from $100 to $300.
  • Legal disbursements and fees, typically around a minimum of $500.
  • The land transfer tax, which is calculated as a percentage of the home’s purchase price.
  • CMHC or PST insurance, which has to be paid in cash at the time of closing on the property and is financed directly through the mortgage.

Some home buyers may also be responsible for handling other real estate closing costs, such as:

  • Water tests
  • The Estoppel Certificate fee
  • Septic tank fees, as you may need to test and ensure it works properly.

Lender Covered Closing Cost

The lender typically covers the appraisal fee, which is the estimate on the home’s value. An appraisal is used to give the lender certification about the resale potential of the home in the event that you are to default on the mortgage and typically costs up to $350.

Other Costs to Factor In

There are several other costs that you may wish to factor in when engaging in a real estate transaction. These include:

  • Property taxes
  • Prepaid utility bills
  • Property insurance

Closing Day

The day on which you obtain legal possession of the home is referred to as the closing day. The book of your administrative work should be done by this stage, including the transfer of the down payment to the attorney.

Transferring down payment pawns particularly from your RRSP can take some time and this why you need to engage in this process several days in advance. On your closing day, the following events will occur:

  • Your lender will give the mortgage funds to your notary or your attorney.
  • You must provide any down payment, minus the deposit to the notary and the lawyer along with any closing cost incurred.
  • Your notary or lawyer will pay the previous owner, officially register the home to you and give you the keys and deed.

Identifying a real estate lawyer who has extensive experience in this field is necessary for ensuring that you have all of the proper aspects considered, and to assist you with moving through this process as smoothly as possible.

Purchasing a home is an exciting experience, but it is one that is also filled with numerous different types of details.

Having a lawyer to guide you through this and give you peace of mind that you have crossed all of your T’s and dotted all of your I’s is helpful for making this process as enjoyable and snag free as possible.

Other Costs of Buying a Home | Diamond & Diamond Real Estate Lawyers

Other Costs of Buying a Home

Additional Costs of Buying a Home That You Should Be Aware Of

Many fees may surround the process of purchasing a home, and it’s valuable to know the other costs of buying a home in advance so that you are fully prepared when you identify your dream home.

In addition to the standard closing costs associated with the property there may be additional costs of buying a home assessed to you, the purchaser, when you buy your new condo or home.

Every one of these fees is dependent on numerous factors, including whether the seller had pre-paid anything for the year that you may need to reimburse that individual for, how the mortgage financing is structured and whether or not it is a new home.

Appraisal Fee

If you are eligible to put down 20% or more towards the purchase price, you will not be responsible for obtaining mortgage default insurance.

However, your lender may still ask for an appraisal of the property you intend to purchase. If the lender requests that you commission an appraisal on the property, they will need someone else to confirm the market value of the home to verify that it is accurate.

This is for your lender’s purposes in the event that you were to default on the home so that they have some awareness of the resale price.

Lenders may also offer you a list of appraisers they typically work with, but you may be eligible to find one yourself. An appraisal fee can cost anywhere from $150 to $500.

New Home Warranty Enrollment Fee

In the majority of provinces, special insurance providers will give warranties on new home bills and that includes all home types not just condos.

This is referred to as a new home warranty. The enrollment fee for this is usually between $500 and $1000. Also, it is very beneficial for a purchaser to consider this in any case because it protects you from having to pay for any repairs that may have been associated with builder error.

You will have to pay for this one of two primary ways: through the purchase price in your mortgage or with cash up front.

Some builders may include such fee in the asking price, but others will not, so it is important to have your attorney review these documents in full well in advance. Make sure you understand what you are responsible for and whether or not it is included before you buy, so you can calculate these extra closing costs.

Hookup Fees

It is essential to have your utilities hooked up and turned on prior to your moving day. These include:

  • Hydro
  • Cable and internet
  • Oil
  • Gas
  • Electricity

Some of these come with various hookup fees, so it is a good idea to set aside a couple of hundred dollars to ensure that you are not surprised by the first bills.

Land Survey Fee

Your lender may request that you obtain an up to date land survey. This process involves a surveyor visiting the property, measuring the land and ensuring that all of boundary lines are being appropriately represented.

A seller will typically commission this survey prior to listing the home and pay the fee, which is usually between $600 and $900. In the event that the seller doesn’t do this, however, and your lender demands this information, you may be responsible for the bill.

Prepaid Condo Fees

If the seller has prepaid their condo maintenance fees for the year, you will need to reimburse them for the pro-rated amount from the day you take possession.

This would typically be outlined in your statement of adjustments.

Prepaid Utilities

If a seller is ahead on payments for hydro, oil, water or gas, you will also be responsible for the reimbursing them for that in a pro-rated fashion.

This should be outlined on your statement of adjustments.

Prepaid Property Taxes

Home owners across Canada are responsible for paying property taxes. They may be paid quarterly, monthly, twice a year or even annually.

In the event that the seller of a home has prepaid their property tax for the whole year, you will be responsible for reimbursing them for a prepaid amount from the day of the closing to the date they have paid up to.

Having a sit-down meeting with your experienced real estate lawyer can help advise you about the various things you will be responsible for on the closing process so that you can create a comprehensive budget.

Identifying a real estate attorney early on in the process is the best way to be completely clear about what you are responsible for, and to take all the necessary steps to protect yourself and prepare yourself.

Being caught with the other costs of buying a home on the big day can damper the excitement of your purchase. So, make sure you are clear about everything you are responsible for well in advance.

First Time Home Buyers Tax Credit | Diamond & Diamond Real Estate Lawyers

First Time Home Buyers Tax Credit

What to Know About the First Time Home Buyers Tax Credit

Did you know that there are first time home buyer benefits in Canada? You should always evaluate whether or not you may be entitled to this home buyer tax credit, as it’s an added bonus to the excitement of buying your first home.

Having a real estate lawyer you can trust is vital for this process, so that you know what to expect over the course of finding and buying a new house.

Understanding First Time Home Buyer Programs

Anyone who is in the process of considering purchasing their first home in Ontario should carefully review their individual needs, and understand all of the potential benefits to which they could be entitled.

Canada’s Economic Action Plan introduced the first-time home buyer’s tax credit to assist Canadians with buying their first home.

It is designed to help recover some of the closing costs associated with inspections, legal expenses and land transfer taxes. It currently works out to a rebate of $750 for all individuals purchasing their home for the first time.

In order to obtain this credit, you must request it within one year or purchase and remember that it is non-refundable. Your home must also meet the eligibility requirements to be a qualified home.

If you are purchasing a home with a friend, partner or spouse, the combined claim cannot go beyond $750.

You will need to identify your first-time home purchase on the line 369 on your personal tax return. In order to qualify for the first-time home buyers tax credit, you will need to meet the following criteria:

  • Be purchasing a new or existing home
  • Be within Canada
  • It must be a mobile home, single semi-town house, apartment or condo.
  • You must intend to occupy the home within a maximum of one year of purchase.
  • You can include cooperative housing corporations or shares that give you home possession.
  • Your home has to be registered in your spouse’s name or your name.
  • You may not have owned a home in the previous four-year period.
  • You cannot have lived in a home owned by a spouse in the previous four years.
  • You must be prepared to submit supporting evidence at the time of your home purchase.
Buying a House from a Builder | Diamond & Diamond Real Estate Lawyers

Buying a House from a Builder

What to Think About When Buying a House from a Builder

When buying a house from a builder, you need to be aware of several key things to expect and look for, so that your interests are protected from the outset of the transaction.

Satisfaction and customer service are critical when buying a new house from a builder. This means that the builder should make each step in the building and buying process as simple as possible for you.

You should always be treated like a valued customer even after you move into your new home. Expect that your builder and/or sales staff associated with the purchase are knowledgeable, efficient, prompt, upfront and open.

When you first visit a model home or the sales office, the builder or the sales staff should provide you with critical information that you can take home.

This should include information about the area and the development in detail, including amenities, schools, shopping, transportation, features and who has purchased already.

They should also be interested in identifying your own housing needs. Once you are ready to purchase, buying a house from a builder should enable you to receive a clear explanation of the entire process.

An orientation tour should be provided to you when you take possession of the new home, so that you can inspect it completely and the builder can explain how everything works.

It is important to understand what is covered by warranties, the time period under which items are covered by warranties and how to request service after the sale is complete.

You also should know what you can expect during the first year and have a schedule of checkups and contacts if necessary.

RRSP Home Buyers Plan | Diamond & Diamond Real Estate Lawyers

RRSP Home Buyers Plan

Why You Should Think About the RRSP Home Buyers Plan 

A Registered Retirement Savings Plan can be an important method of making your down payment on your mortgage.

The home buyers plan offered by the Canadian Government enables first time home purchasers to borrow as much as $25,000 from your RRSP tax rate to make your down payment.

In the event that you are eligible to purchase a home with another first-time home buyer, you can both tap into $25,000 from your RRSP for a total of $50,000.

Since the HBP is classified as a loan, however, you need to bear in mind that it must be repaid within 15 years. In order to be eligible, you must meet the following criteria:

  • Have entered into a written agreement to purchase or build a qualifying home.
  • You have not owned a home in the previous four years.
  • If purchasing with a spouse, you cannot have lived in the house they have owned in the previous four years.
  • RRSP funds must have been in place into your account for the minimum of 90 days prior to withdrawal.
  • You cannot have any outstanding balance due associated with a previous home buyers plan.

What Happens if You’re Not Eligible for the Home Buyers Plan

If you take a withdrawal from the RRSP, but are not eligible for the first-time home buyer’s requirements, this withdrawal is taxed and you will need to report it for tax purposes.

In order to participate in this process, you need to print off a copy of Form T1036. This is available on the Canadian Revenue Agency’s website.

Filling out section 1 is the initial process that allows you to provide this to your financial institution. Your financial institution can then hold your RRSP so they can fill out the second section.

You will then resend a T4RRSP form which will confirm how much money was taken from the RRSP as part of a home buyers plan. You will need to include this in your income tax return for the year in which you made the withdrawal.

Bear in mind that you have to take this withdrawal at least 30 days before taking title of the home. If you try to do this outside of this window, your withdrawal is no longer eligible for the HBP.

You must repay the amount taken from you RRSP within a period of 15 years. The first payment is due two years after you first withdrew the money. You will get a notice of assessment directly from the Canada Revenue Agency and this will indicate the amount of a loan that has already been repaid and the amount that remains.

If you miss any payments, this could require you to include the amount that you did not pay as RRSP income on your taxes. You will need to put this on line 129 on your return.