A Lawyer's Role in Real Estate Purchase

by Trevor B. Spurr, Lawyer ( in private practice since 1975)

The part that a lawyer plays in the purchase of residential real estate is not well understood by first time home buyers in particular, but everyone recognizes that you need one to do the deal.

The lawyer's involvement can start even before you make your offer as he or she can help you, along with the REALTOR®, in setting the terms of the deal so that you are protected and get what you intend. The lawyer knows how the pieces fit together and so can explain the role of the real estate agent; the costs of closing the deal; the ins and outs of mortgage financing and all the small print in the offers; the need for a survey; the nature of buying under power of sale proceedings if that's the kind of purchase you are contemplating; what is involved in certifying title and all the other steps between the offer to purchase and the happy day the keys are put in your hands.

If you are selling then you know more of what's going on but questions still arise.

So give some thought to contacting a lawyer early in the process and then you have time to find one who fits your needs and personality. Your first contact can be on the phone because if a lawyer who doesn't want to invest some of his or her time in talking to you about your purchase or sale and selling you on his or her services is probably not going to be the one for you.

The most frequent question of course, is what does it cost to close the deal and most particularly what are the legal costs. If you phone around for quotes you will discover that a lawyer talks about the fee (his or her labour) and disbursements (the parts). Some will quote low fees for the purchase but then there is an additional fee for doing the work for the institution giving the mortgage. Other lawyers will give you one fee for the whole transaction, so be careful not to be fooled by what appears to be a low fee for "just the purchase".

When it comes to disbursements, then even more variations can occur. Disbursements cover the cost of researching the title to the property and such miscellaneous items as couriers. A lawyer with a low fee may have higher disbursements because he or she uses agents (para legals) to do the work and charges their fees to you as a disbursement. As a result disbursements can vary between lawyers by hundred's of dollars.

My advice is to ignore how the lawyer gets there. You want to know what is the bottom line.

You should expect to be in the range of $900.00 to $1100.00 in the present market.

For the sake of your peace of mind and for the benefit of those lawyers who are friendly and helpful, do not pick a lawyer solely on price. You will demand and will need service and if you cannot speak to your lawyer except through the staff or worse yet, voice mail, you will be very frustrated and will go through unnecessary anxiety.

For your information, I have appended a list of typical fees and disbursements which you can expect to find.

Another significant cost to you on a purchase will be for land transfer tax and document registration fees which are paid to the provincial government at the time of closing. The tax is a one time charge on any acquisition of real estate and is based on the price of the property.

I am also providing a formula for calculating this tax as part of this information package.

If you would like further information, please give me a call. You will find me to be approachable and professional and I do not have voice mail during regular office hours.

Trevor B. Spurr Suite 408, 90 Eglinton Avenue E., Toronto Telephone: 483-1242 Fax: 483-2903