Buying or Selling a Home in British Columbia

When should I consult a lawyer?

The answer is easy - right at the beginning.

Contrary to the current practice in the real estate industry of involving lawyers at the tail end of the sale or purchase transaction –basically to paper over a "done-deal", its highly recommended that prospective sellers and buyers retain counsel before they sign on the dotted line, particularly since a real estate transaction usually is one of very significant value to the parties involved [a modest home on the west side of Vancouver is running about $700,000 in today's market].

The reasons for getting a lawyer involved from the get-go are both obvious and compelling.

Why would you sign off on a million dollar contract and then have your lawyer review it?

A lawyer can't fix up a poorly worded contract after it's signed, sealed and delivered [and subject conditions to the contract have been removed].

Being in the business, real estate lawyers are familiar with the best realtors and mortgage brokers and can recommend them to a prospective purchaser or seller.

If you don't want to use a realtor, a lawyer can act for you as your agent in selling or buying real estate in BC.

A lawyer is trained to act as your advocate and can generally provide impartial advice, unlike a realtor who has a vested interest in obtaining his or her commission.

If you want to sell your own home without any agent, a lawyer can walk you through the process, show you how to get your home on the MLS for a nominal listing fee (about ½ of one percent), draft the sale agreement and complete the conveyancing [title transfer] for a fraction of a normal real estate commission [which is typically 7% on the first $100,000 and 2.5% of the remainder of the home's value].

Even if you are a fairly accomplished negotiator, it's always harder to negotiate for yourself than for someone else. In litigation circles, it is said that he who represents himself has a fool for a client. Let a lawyer negotiate for you and chances are that he or she will end up saving you money.

Lawyers can advise you about ancillary products to conveyances such as title insurance, which for a modest, one-time premium can substantially minimize the risk associated with purchasing real estate. This product has no deductible and it's good for as long as you or your immediate family heirs own the home.

Lawyers can spot a potential problem before you sign [or before you remove subject conditions], such as possible GST liability, non-resident holdback requirements under the Income Tax Act [Canada] or ineligibility for special tax exemptions [maybe your kids don't qualify for a first time homebuyer Property Transfer Tax exemption].

Lawyers can also steer you clear of pitfalls such as letting realtors talk you into a dubious relationship called a "limited dual agency agreement", whereby the realtor purports to represent BOTH the seller and the buyer at the same time. While this agency agreement is permissible under the Real Estate Act, it is NEVER a good idea, as the seller and buyer have diametrically opposed goals -one being to get the best price and the other the least!

The end result is no effective representation for either party, despite the full commission going the single agent!

At the end of the day a lawyer still has to be involved in the closing of your real estate transaction, so our advice is involve him or her sooner than later. In BC, notaries public can prepare and witness transfer or mortgage documents but in the author's opinion, their limited legal training makes it unlikely that they would be able to recognize or effectively deal with a complex or unusual occurrence which could arise on a purchase or sale. As notaries are neither trained nor authorized to appear in court, they must ultimately turn over litigious files to lawyers anyway, so a client might as well have a lawyer dealing with the file in the first instance.

An ounce of prevention is not only worth a pound of cure in the medical world.