The Importance of Using Lawyers in Mortgage Transactions

For many of us, buying or selling a house will be the largest financial transaction we will ever make. On a business level, a commercial real estate transaction can be one of the most significant commercial transactions your company might participate in.

Today, the successful and timely closing of a real estate purchase or sale is dependent on the cooperation of a number of professionals, including the real estate agent, mortgage broker, land surveyor, home inspector, insurance agent and, of course, your lawyer.

Professional, experienced lawyers and legal assistants take pride in making these experiences as stress free as possible for you by coordinating all aspects of the closing. They will keep you fully informed of every step in the process and do all that they can to ensure your real estate transaction closes on time and your costs are minimized. Years of experience in completing these transactions, whether for the sophisticated commercial real estate investor or for the first-time home buyer is what you want to look for when sourcing a mortgage lawyer.

Experienced lawyers can help protect your home, your business or your major investment.
If you’re buying a home, your lawyer should:

• Help you understand the purchase contract, including how you will take title on the property.
• Check that there are no covenants, easements, liens, etc. registered against the property that will impede your use of it.
• Prepare and register all the legal documents.
• Clarify the terms of the mortgage and work with your bank, if necessary, to modify them.
• Scrutinize the adjustments, including taxes owing and utilities costs paid, prior to the transaction closing.
• Attend the closing and review all the papers you will be required to sign.
• Arrange title insurance protection to protect you from losses due to title defects.
• Ensure you receive a valid registered ownership subject only to the liabilities you have accepted.

If you’re selling a home, your lawyer should:

• Review the binder and review or prepare the purchase and sale agreement, including negotiating its terms.
• Prepare the deed and power of attorney if necessary.
• Deal with title issues as they arise and help correct them.
• Attend the closing and review all the papers you will be required to sign.
• Arrange for transfer of security deposits.
• Arrange for insurance certificates if needed.

How much does this all cost? Typically, legal fees are higher when you buy than sell because the role of the buyer’s lawyer is more extensive. Most fees range from $650 to $1,100 for an average home whether you’re the buyer or the seller.

Some lawyers charge a flat fee for specific services and others bill by the hour. If you are paying by the hour, make sure you understand what the final cost is likely to be and insist on regular accounting for charges. Usually, a lawyer can easily estimate costs related to a real estate transaction and his or her fees will only go higher if something goes wrong. Remember, even if your deal does not close, you’ll still owe your lawyer for his or her time.