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Buying a Home - The Process
No two transactions are exactly the same, as each requires specific care and attention. This page explains the general process of how buying a home works and what we at Guertin Lawyers do for our clients as part of that process. It describes:
- Types of Purchases
- Offer to Purchase
- Conditions of Purchase
- The Green Light
1. Types of Purchases
While most home purchases share many similar characteristics, there are differences in the buying process depending on the type of home you are purchasing. You must first know what kind of home are you looking at purchasing:
- A new home
- A resale home
- A rental property that you will inhabit
A New Home
In the case of a new home purchase, The Ontario New Home Warranty Program (ONHWP) applies. Established in 1976, the ONHWP is a private corporation whose mandate is to protect the rights of new-home buyers. It regulates new-home builders by ensuring that they abide by the ONHWP Act, and it protects consumers by intervening when builders fail to fulfill their warranty obligations.
It is the responsibility of your builder to enroll your home in the Warranty Program. As part of this process you will be required to perform and sign off on a final inspection, and you will be provided with several documents for your records. As part of our fixed price for new-home purchases, we review all such documents to ensure that your new-home purchase is a solid investment from a legal perspective, and that the home you purchase meets ONHWP requirements.
To read more about the Warranty program Act, click here.
A Resale Home
If you are buying an existing (previously owned) home, you are not covered by any formal warranty. It is your responsibility to inspect the property, or have it inspected at your expense or at the homeowner's expense in certain conditions.
As part of our fixed price for resale home purchases, we play a critical role in assessing the health of the property from a legal perspective, ensuring that the vendor has the right to sell the house, that no one else has any claim to it, and that there are no substantial utility account arrears that you may inherit. Should there be any issues to your title to the property, we resolve them.
A Rental Property That You Will Inhabit
If you are considering buying a multiple-unit dwelling and living in one of the units, you become responsible for the existing tenants. Tenants are protected by the Land Tenant's Act, and by their leases. It is your responsibility as buyer to review the leases, know the tenants' rights and obligations, and your rights and obligations as lessor.
As part of or our fixed price for rental property purchases, we review and help you understand all terms of the leases, such as their duration, who pays for utilities, and so on, and we ensure that your rental property purchase is legally sound.
2. Offer to Purchase and Conditional Offers
The legal component of buying a home begins with your offer to purchase — the agreement of purchase and sale. This agreement identifies the property you are purchasing, the buying price, and the terms and conditions of the offer. Terms and conditions may include a variety of items that you and the seller have agreed on such as:
- The purchase price
- The closing date
- Inclusions and exclusions, such as appliances, draperies, machinery, materials and other items specified as part – or not part – of the sale price
- Conditions that may apply to the offer, such as a building inspection or financing conditions (see #3 below)
- The dates by which conditions must be waived in order for the offer to proceed
You can expect us to review your agreement of purchase and sale and advise you of your rights and obligations, as well as any special clauses.
3. Conditions of Purchase
Most offers are conditional – that is, they do not proceed until specified conditions have been waived. Throughout the course of formalizing the offer, these conditions must be acted upon and either waived – allowing the transaction to proceed – or enacted, which can result in termination of the offer to purchase. Examples of typical conditions are:
- Purchase subject to report from a building inspector for a resale home
- Purchase subject to buyer selling an existing home
- Purchase subject to buyer receiving mortgage approval form a lender
- Confirmation by seller of certain elements pertaining to the home, such as insulation, rights-of-way, disputes, zoning, second mortgages, etc.
4. The Green Light
Once all conditions have been reviewed and waived, the transaction is ready to close. As your lawyer, we will perform a variety of duties and tasks that are designed to ensure that you can close on the property per the agreement, and ensuring that your new home investment is legally sound.