Buying a House From the Owner

If you are buying a house directly from its owner, you have the responsibility of contacting a real estate lawyer* and making arrangements for the sale and bank documents to be sent to their attention.

*Please note that a notary fills this role in the province of Quebec.

The Lawyer’s Role

  • For a real estate agreement to be binding, it needs to be in writing, and signed by both parties.
  • The services of a lawyer are required when a deal is struck. Among other things, the lawyer will help ensure that the terms of the sale agreement are carried out.

Tax Burden

  • The buyer must pay the entire year’s taxes on any sale that takes place prior to the month of June.
  • The lawyer makes arrangements to credit the buyer for the portion of taxes that applied when the seller still owned the house.
  • If the seller has already paid taxes for the entire year, the buyer will pay the seller back for what remains of the year following the sale.

Preparing the Transfer

  • The lawyer is involved in preparing the Transfer, the document that transfers the title of the land from seller to buyer, signed by both parties.
  • A lawyer also prepares the mortgage, which is signed by the buyer, who then must arrange all the funds required to complete the transaction.
  • When the buyer’s lawyer has the Transfer from the seller’s lawyer, gets the mortgage signed by the buyer, and the funds to complete the deal, the lawyer will submit the Transfer and mortgage to be registered at the Land Titles Office.
  • The lawyer will submit the documents early to ensure a mutually convenient “closing’” date, at which time the buyer can take full possession of the house.

Final Arrangements

  • When the home is finally placed in the name of the buyer, and the mortgage is registered on the title, the buyer’s lawyer sends the purchase money over to the seller’s lawyer.
  • The seller’s lawyer pays out the seller’s old mortgage, and pays the rest of the money to the seller, along with arranging the discharge of the seller’s mortgage.
  • The buyer’s lawyer will send the buyer copies of all pertinent documents, including a copy of the registered mortgage, and a certified copy of title showing the buyer as the new owner.