Buying or Selling a Home in Ontario

Jed M. Chinneck for The Lawyers Weekly

Why Ontario?

Ontario is a great place to be buying or selling a home for a number of reasons:

  • Ontario has one of the most advanced land registration systems in the world. Titles are relatively easy to search and transfer. In Ontario many of the title transfers are done electronically, although some areas have not yet been converted to the electronic system.
  • Title Insurance is available in Ontario through at least 4 separate insurers in addition to the old method of solicitor certification. Title insurance provides broader protection at lower costs, and is especially useful in protecting against title fraud.
  • Ontario has competent, well regulated professionals including Ontario real estate lawyers, bankers, mortgage brokers, and home inspectors that service the home sector. Of course, there are always unscrupulous professionals, so take care in selecting the professional that you will work with.
  • The costs of buying, selling and owning real estate in Ontario are very reasonable. Mortgage rates have been at near record lows for the last three years; mortgages brokers are usually paid by the lender for finding the best mortgage rate for the buyer, and Ontario real estate lawyer's fees and disbursements are reasonable in most areas due to competition.
  • Ontario has a protection plan for new home buyers to protect against unscrupulous vendors called Tarion. It provides warranties to new home buyers that protect them against certain problems that might arise in the future.
  • Ontario has mortgage insurance programs designed to help people with little or no down payment when buying homes, by allowing them to qualify for mortgage loans they would not otherwise qualify for.
  • For U.S. residents and other non-residents of Canada, there are no penalties or hidden taxes when buying, but there may be capital gains taxes that must be paid on the sale if you have not become a resident of Canada.

Ontario Real Estate Lawyers: Recommendations

If you are buying a home for the first time in Ontario, you're probably more than a little nervous. Don't be; thousands have done it and survived. You can too!!

The process is as simple as 1,2,3. First, find a house in Ontario in your price range. Second, sign an offer that protects you and that is acceptable to the vendor. Third, close the purchase and move in.

We recommend that you get informed about the process and surround yourself with a good team, including a competent Ontario real estate lawyer, who can deal with all of the issues and problems that may arise in the case of finding and buying the right home for you. In other words:

  • Get informed. Canada Mortgages and Housing (CMHC) has a guide for new real estate buyers called Homebuying Step-by-Step: A Consumer Guide and Workbook.
  • Get a good Real Estate Agent who will take the pain out of finding the right house in the right location at the right price for you. Make sure you know who the agent is working for (you, the seller, or both).
  • Get a good Mortgage Broker who will "shop" your financial information to get you the best mortgage with the best rate, without any cost to you. They can pre-qualify you for a mortgage so you will know how much you can afford.
  • Get a good Home Inspector who will inspect the home you wish to buy and provide you with a report of any defects, difficulties or problems. Understand that most home inspectors do not provide any opinion about things they
  • Get a good real estate Lawyer who will "quarterback" your purchase and coordinate you and your team to a smooth closing. Your Ontario real estate lawyer will also provide you with assurance of good title (by way of his/her opinion or title insurance) If asked, the real estate lawyer will review or prepare offers to purchase and will ensure that clauses designed to protect you are included (such as conditions for financing, home inspection, etc.).

Things to watch out for

Home buyers in Ontario should be aware of the following:

  • "Buyer Beware" is still the law in Ontario. Be sure to check the home you are planning to buy very carefully. Also insist on the vendor delivering a completed and signed Vendor Disclosure Statement before your offer to buy. In other words, be sure to do your due diligence investigations.
  • Land Transfer Tax ("LTT") is payable by the buyer on registration of the transfer. LTT is a percentage of the purchase price for the home.
  • In Ontario, agreements respecting land must be in writing, signed and witnessed to be enforceable. Be sure the written offer includes terms, conditions and warranties respecting everything that is important to you.
  • Fixtures and Chattels. Fixtures are attached to the lands; chattels are not, but there is confusing case law on the issue, so "when in doubt, spell it out" in the contract. For example, a dishwasher may appear to be a fixture, but it may not be, so stipulate in the Agreement that it is a fixture that is included in the purchase.

Jed M. Chinneck, Lawyer, is at JMC Lawyers.

A great way to start your search for a local Canadian Real estate lawyer is at Go to the 'Find a Lawyer' search box that appears on the right hand side of this screen to start your lawyer search. Type in Real Estate or the name of the law firm, the city and the province that you are looking to hire a lawyer from, and click on the 'Search Now' button. This will generate a list of local Canadian Real Estate lawyers.

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