Real Estate
Buying or selling a home is one of the most significant financial decisions you’ll make. This journey is exciting but can be overwhelming when navigating legalities and paperwork. That’s where Lange Law comes in. Our team is committed to guiding you through the process step-by-step, taking care of every legal detail so you can focus on the excitement of your new home or the next chapter in your life. We pride ourselves on making complex legal processes as smooth and transparent as possible for you.
Whether you’re a first-time homebuyer, looking to refinance, or ready to sell, we have the expertise to handle it all. Our goal? To provide clear communication, protect your interests, and ultimately, give you peace of mind.
Below are some things you should consider when buying a home.
Closing Costs
In addition to your down payment, how much money are you required to bring into my office to close a purchase transaction?
A good rule of thumb is to expect closing costs to be 2.5% of the purchase price. So, the closing costs for a property with a purchase price of $500,000.00 would be around $12,500.00.
Closing costs can be one of the most confusing aspects of buying a home. While we’ve provided a rough estimate of 2.5% of the purchase price, it’s important to understand what this covers. Your closing costs include the lawyer’s fees for reviewing and preparing all the necessary legal documents, facilitating mortgage disbursements, and ensuring the title is clear of any liens or encumbrances.
In addition to legal fees, you might be responsible for land transfer taxes, registration costs, and adjustments for pre-paid property taxes or utility bills. These fees are essential to the finalization of your real estate transaction.
A portion of the closing costs may be returned to you when we finalize the transaction because we often over-collect to ensure we have sufficient funds to close the deal. The amount being returned is often the amount we collect for any potential interest obligations a client might have for a delay in the mortgage funds being advanced, which is normal (see clause 2. (b) of the Offer to Purchase). I call this amount a security deposit and it is required in order for my office to release the keys to you before your mortgage funds have been provided to the seller.
At the end of the process, the actual closing costs likely are closer to 2% of the purchase price. However when you are bringing in funds before possession, the amount will likely be closer to 2.5%.
If you want to see how the closing costs typically break down, take a look at our example titled “Estimate of Closing Costs”. (Disclaimer: Some costs might change from the example.)
The Property Registry has a land transfer tax estimator, which is helpful (https://teranetmanitoba.ca/land-titles/land-titles-fees/) and a great explanation of how they calculate transfer tax (https://teranetmb.zendesk.com/hc/en-ca/articles/4790708040731-What-is-land-transfer-tax-and-how-is-it-calculated)
You can also find our Fee Schedule here.
Keys
After wanting to know the closing costs, the next most common question we get is about receiving your keys. Typically, the seller’s lawyer will provide my office with the keys before the possession date. If you have completed all your conditions, we can give you the keys before the possession date to be used on the possession date and time. If you use the keys before the possession date and time, it can be considered a “break and enter” or a trespass. Therefore, it is important that you wait until the proper time to use them.
It does happen that keys are not provided to my office until very late on the day before possession or that the keys are not provided to my office until some later time. For this reason, you should be cautious in making arrangements for services or arranging movers for the possession date.
Title
Generally, a purchaser may choose to take title in one, two, or several people’s names. When taking title with someone else, you must decide whether to take title as joint tenants or tenants in common. With tenants in common, each owner owns a distinct share of the property. For example, two owners typically own 50% each. If one owner dies, their interest in the property will be dealt with through their estate. In joint tenancies, each owner owns the whole of the property. Joint tenancy is like a real-life game of Survivor, where the last person alive becomes the sole owner of the property. Spouses usually take title as joint tenants. Where a parent is going on title for financing purposes, they will usually be added as a tenant in common with a 1% interest.
Title Insurance
Title insurance is not just a closing requirement for lenders—it's also a critical safeguard for homeowners. Although it’s a one-time payment, the protection it offers lasts a lifetime. Title insurance protects you from potential issues such as fraud, zoning violations, or outstanding permits that might not be evident during the purchase process.
Imagine purchasing your dream home and later discovering that a portion of it was built without the necessary permits, and now the city wants you to remove it. Title insurance ensures you won’t be financially responsible for correcting issues like this. Additionally, it can protect you against unforeseen property tax adjustments or even fraudulent claims of ownership. Our office can walk you through the benefits and answer any questions about how title insurance will protect you.
Property Taxes
As part of the closing, we ensure everyone pays their share of the property taxes. We call this a tax adjustment. Contrary to what most people think (myself included before I started practicing real estate law), property taxes are charged on a calendar year basis, meaning from January 1 to December 31. In Winnipeg, property taxes are due on June 30. The due date varies for rural areas. There are several ways that taxes will be adjusted, depending on the situation, but generally speaking, if you are buying your home before the property taxes are due, you should expect to pay the full amount of the property taxes for the year when they become due, and you will get the seller’s share as a discount on the purchase price.
Utilities
Other than the water bill, utility accounts are personal obligations. If the seller does not pay their utility bills, the utility companies will not charge you, except for water. If the seller does not pay their final water bill, it will be added to your property tax bill. No need to worry, as your title insurance policy will protect you from any unpaid water bills from the seller. When you move into your new home, you need to take all your meter readings, and I recommend that you take photos with your phone, so that you have a timestamped record ofwhen you took the reading. Sometimes, there are disputes about the reading at the time of possession, but digital photos can easily resolve that issue.
Home Insurance
If you are using a loan to fund your real estate purchase, you must provide proof of home insurance before we can release keys to you. Where you buy your home with cash, you are not required to get home insurance. However, I strongly recommend that you get home insurance on the property even if you do not require it. Where you are borrowing money to buy your home, you need to let your insurance broker know the name and address of your lender, as this information must be included in the insurance policy.
Final Report
We will send a final report with all documents that you have signed, along with a detailed breakdown of all financial adjustments. We try to get you the final report 4-6 weeks after the possession date; however, sometimes it will take longer than that. If it is taking longer than 4-6 weeks, it is nothing to be concerned about, but feel free to reach out, and if you need your report sooner, please let us know.
Issues After Closing
Sometimes, unexpected issues arise after a real estate deal is closed. Maybe you discover a hidden defect in the property or run into complications with the seller over certain aspects of the contract. Should this happen, our team is available to discuss the legalities and potential solutions with you at no additional cost.
However, please understand that while we are happy to consult on any post-closing issues, some cases may require the expertise of a litigation lawyer. If so, you’ll need to engage a litigation lawyer to take over if your issue escalates to the courtroom.
Selling your home can bring mixed feelings. It can be very exciting as you move to a new stage in your life but also sad because that means you are leaving another part of your life behind. I remember my wife crying as we left our first home because it was where we brought our first child home from the hospital, where she took her first steps, and where we created so many other beautiful memories.
We’re here to deal with what legally needs to be done so you can say goodbye to your home and move on to the next stage in your life.
Costs
Our costs are set out in our fee schedule.
Usually, when selling your home, there are not many closing costs. Our fees, disbursements, and sales taxes are typically what you are looking at. From your sale proceeds, we will pay, on your behalf, the realtor, assuming it is not a private sale, any outstanding property taxes, any loans that are secured against the property, and anything else that you instruct us to pay.
Sale Proceeds
What everyone wants to know is when they will get the sale proceeds. I tell everyone to expect it could take up to 3 weeks, but hopefully, we surprise you by providing you with your sale proceeds within a couple of days of possession.
The reason I tell everyone 3 weeks is because the standard offer to purchase allows the buyer to provide their mortgage funds after the possession date, and historically, we used to see those funds weeks after the possession date. Nowadays, most law offices provide the balance of the purchase price on or a day after the possession date. When we receive the balance of the funds, my office prioritizes the payout and reporting of sale files, so you may receive the sale proceeds a few business days after the possession date. However, I CANNOT GUARANTEE that you will get the sale proceeds a few days after the possession date, and that is why I say you should expect it to take 3 weeks because it could.
When we are paying you the sale proceeds, it is our preference to deposit the funds directly into your bank account, but we cannot deposit into bank accounts that are not accessed at a branch.
Home Insurance
I advise sellers to keep insurance as an unpaid vendor until the sale proceeds are released to them (which can take several weeks after possession). The reason for this is that while the purchaser is required to have arranged insurance coverage, there is no way to ensure such coverage is valid. If the property is destroyed before the purchaser’s
mortgage funds are released, and the purchaser’s insurance coverage is denied, the seller may have to rely on their insurance coverage for protection.
Property Taxes
As part of the closing, we ensure everyone pays their share of the property taxes. We call this a tax adjustment. Contrary to what most people think (myself included before I started practicing real estate law), property taxes are charged on a calendar year basis, meaning from January 1 to December 31. In Winnipeg, property taxes are due on June 30. The due date varies for rural areas. There are several ways that taxes will be adjusted, depending on the situation, but generally speaking, if you are selling your home after the property taxes are due, you should expect to pay the full amount of the property taxes for the year, including any penalties and interest, when you sell, and you will get the buyer’s share in addition to the purchase price.
If you are selling a property in Winnipeg and are paying your property taxes through TIPPs, we shall cancel those payments on your behalf.
Possession Date
At the time that you are leaving the property you will need to do the following:
- Leave the furniture, appliances, and other personal property in the property that you agreed to leave as part of the Offer to Purchase. Take everything else out of the property;
- Leave the extra keys, alarm code, garage door openers, and anything else which is related to the property on the kitchen counter so the purchase will be able to find them;
- Take the hydro, gas, and water meter readings and call them into the respective entities for your final readings. I suggest that you take a photo of each meter reading.
Since buying your home, you may have built up equity. You may want to use the equity in your home for many reasons (consolidating debt, buying a cottage, or something silly like buying a boat), but you need to refinance your mortgage to get access to it.
I have not been able to convince my wife that it is a good idea to refinance our mortgage to buy a fishing boat, but I am happy to live vicariously through you.
Costs
Our costs are set out in our fee schedule.
Usually, when refinancing your mortgage, the costs vary depending on your particular situation. Our fees, disbursements, and sales taxes are typically what you are looking at. If you are changing the ownership of the property as well, perhaps taking someone off title who is no longer required, there could be transfer tax involved. Reach out to us so that we can provide you with an estimate of your costs.
Paying Debts
If part of your refinance is paying off some existing debts, you must provide my office with statements for those debts. Usually, we can get payout statements from financial institutions, but for credit cards or car loans, it is usually fastest to get that information directly from you. We will ask you for a statement at the start of the file to confirm the amount of the debt, and we will ask for a further statement when we are paying off the debts to ensure we pay out the current amount.
In some cases, your lender may ask us to confirm that the credit account is closed. In that case, the disbursement of any balance of mortgage funds might be delayed until we can confirm that the account is closed. Usually, we will look to do a small holdback to deal with any discrepancies, but where the debt is a revolving charge, like a credit card or line of credit, we may not be able to release any funds.
This can cause unexpected delays in getting the funds from your refinance. Please reach out to my office to discuss if you need these funds by a certain date.