As any homebuyer or seller will tell you, the real estate transaction process is rife with documents – agreements, reports, policy proof, financial statements and more. Keeping track of these documents can be a spinning plates act, requiring foresight, administrative accuracy – and, of course, the help of an excellent real estate agent.
To help you make sense of the mound of paperwork, this article lists a few of the most important documents here in Canada. Find a capable and trustworthy real estate agent to ensure you complete, file or retrieve these essential documents along the correct timeline.
Agreement of Purchase and Sale
This is the document that every other document works toward. It’s the contract between seller and buyer that outlines the terms, price and conditions of sale. Essentially, the buyer agrees to purchase the property at a stipulated price provided that each condition within the agreement is met (these might be conditions on financing or subject to inspection). Other terms detailed in the agreement are a completion date, possession date and adjustment date.
Property Title
A property title can mean a couple of (related) things. In one sense, it is a legal, intangible construct acting as “evidence of the registered owner’s interests in the land.” In another sense, it refers to the actual formal documentation proving you are the property’s legal owner.
Property Disclosure Statement
Before you make an offer, a seller may provide the buyer with a property disclosure statement. In provinces like Ontario, these statements are voluntary (but strongly recommended). Meanwhile, the statement is mandatory in other provinces like BC. Essentially, the property disclosure statement outlines problems with the property and explanations for how to address these problems.
Home Inspection Report
A home inspection isn’t required when purchasing a home, but the government strongly recommends them as a risk mitigation strategy. “A home inspection can save you a lot of money in the long run,” writes the Office of Consumer Affairs.“ If you purchase a home without getting a proper inspection, you could end with problems that cost you tens or hundreds of thousands of dollars.”
Listing Agreement/Buyer’s Agency Agreement
A service agreement with a real estate brokerage is one of the first documents you’ll encounter on your home-buying or selling journey. For sellers, this is the listing agreement; for buyers, it’s a buyer’s agency agreement. In either case, it engages you exclusively with an agent and outlines the terms of your relationship. Before choosing an agent, consider shopping for your options on Nobul, an open real estate marketplace developed by Regan McGee here in Canada. The platform offers transparent information on agents and lets you shop for lower commission rates.
Mortgage Agreement
Basically, a mortgage agreement is a promise you make to a lender that you can repay the money you’ve borrowed plus interest. Built into this agreement is the stipulation that the lender (typically a major bank) has the right to possess your property if you fail to repay. For homebuyers, the mortgage agreement is the culmination of several processes: pre-qualification, pre-approval and approval.
Insurance Policy
While not strictly a requirement, most lenders require proof of insurance before issuing a loan. So, unless you have the total purchase price of a home in your back pocket, you need an insurance policy. You can shop for policies online and choose one that fits your particular situation.
Talk to your real estate agent about the documents above to ensure that you stay on top of the real estate transaction process.