A TYPICAL REAL ESTATE TRANSACTION IN CANMORE, ALBERTA, CANADA

There are many people involved to bring the purchase and sale of Property to a successful conclusion including the Seller, Buyer, Listing Realtor, Selling Realtor, Selling Brokerage, Listing Brokerage, Seller's Lawyer, Buyer's Lawyer, Mortgage Broker, Lender, Appraiser, Home Inspector, Insurance Agent, Property Managers and all of their staff.

I have prepared this based on an actual transactions where I acted for the Buyer and Mortgagee respecting a SINGLE FAMILY DETACHED HOME. Every Real Estate Transaction is different but generally follows what is outlined herein.

BUYING A CONDO - See Condominiums for information specific to Condominiums, however, what is set out below also applies to "Condos".
BUYING IN BANFF - See Banff Properties for information specific to Banff properties, however, what is set out below also applies.

PLEASE NOTE: IF YOU ARE BUYING AND SELLING A HOME AT BASICALLY THE SAME TIME, REVIEW THE "BRIDGE FINANCING" WEB PAGE TO DETERMINE WHETHER YOU NEED TO ARRANGE BRIDGE FINANCING.

The following describes a typical purchase and sale of a single family detached home in Canmore, Alberta, Canada.

THERE ARE BASICALLY FOUR MAIN AREAS INVOLVED:

A. From Listing of the Property to Unconditional Offer:

1. The Sellers decide that they are going to sell their Property and go to talk to the Seller's Realtor.

2. The Sellers and the Seller's Realtor discuss the situation and assuming they are in agreement on the Selling Price, Commission and other terms, enter into a Listing Agreement. The Seller should also ensure that they have an ACCEPTABLE Real Property Report with Compliance available, for in most Contracts, the Seller is obliged to provide a Real Property Report. See Real Property Reports for more information

3. The Seller's Realtor then develops a marketing plan for the Property which includes holding an open house for all the Realtors in the area, advising all of his colleagues in the office about the Property that has just come on the market, calling potential purchasers advising them that the Property is for sale, preparing advertising materials and placing a For Sale sign on the Property.

4. Depending upon how active the market is, this phase can be as short as a day until a point in time where nothing is happening and the Property is taken off the market. There are many reasons why some properties don't sell, but the main reason is that the Seller is asking too much money for the Property.

5. Then one day, there is an Offer to Purchase the Property. A Buyer's Realtor has a client who is interested in purchasing the Property and has asked the Buyer's Realtor to prepare the Offer to Purchase and present it to the Seller's Realtor. There really is no need for the Buyers to retain the Buyer's Lawyer at this time unless there is something unusual with the Property. It is generally preferable to obtain an accepted Offer first; in other words, see if you can get the Property for the price you are willing to pay and insert a Subject To Clause indicating that the Offer needs to be reviewed and approved by the Buyer's Lawyer if you have some concerns.

6. The Sellers and Buyers can go back and forth many times respecting counter-offers and further counter-offers until they reach agreement on the terms of the Contract. Most Offers to Purchase have Subject To Clauses which need to be satisfied. The Buyer's and Seller's Lawyers will be retained once all of the Subject To Clauses have been removed. If there is a Subject To Clause respecting "Buyer's Lawyer's approval", then the Buyer's Lawyer will need to be retained earlier. When all of the Subject To Clauses have been satisfied, there is a Firm Deal.

7. The Seller should expect to pay Legal Fees (fees, disbursements and GST) for a typical sale of approximately $1,000. The Seller can calculate approximately how much money they will ultimately receive from the sale of the Property, after deducting their costs such as Legal Fees, Commissions and Adjustments, by using the Seller's Cash Calculator.

8. The Buyer should expect to pay Legal Fees (fees, disbursements and GST) for a typical purchase of approximately $1,100. The Buyer can calculate approximately how much money they will ultimately need for the purchase of the Property, after adding their costs such as Legal Fees and Adjustments, by using the Buyer's Cash Calculator.

B. Completing the Purchase and Sale:

1. Once there is a Firm Deal, the Listing Real Estate Company prepares and forwards to the Buyer's Lawyer and Seller's Lawyer, a letter confirming that you have been asked to act for the Buyers or Sellers, outlining the Commission due on the Transaction and enclosing a copy of the Contract.

The TIMETABLE FOR THE BUYER and the TIMETABLE FOR THE SELLER set out below, IN THIS COLOUR, is normal for when the Buyer and Seller must meet with their respective Lawyer, however, every deal is different!

TALK TO TOM DOCKING-LAWYER TO OBTAIN MORE PRECISE DATES FOR YOUR TRANSACTION.

2. WHAT DOES THE BUYER'S LAWYER DO?

reviews the Instruction Letter and Contract
contacts the Buyers, confirms acting for the Buyers, confirms personal details, discusses any preliminary issues raised by the Contract, determines whether Bridge Financing is needed and arranged, opens Buyers file (very soon after Instruction Letter and Contract arrive)
orders a copy of the Title and any Charges that will be remaining on Title
advises Buyers of any concerns re Charges that will remain on Title; generally the existing Charges on Title are acceptable. (usually done at time of initial contact with Buyer)
reviews Mortgagee's Instruction Letter
prepares the conveyancing documents including Mortgage Documents, Tenancy at Will Agreement, Transfer Back,
advises Buyers of Mortgagee's insurance requirements, the amount of the Cash Shortfall See Buyer's Calculator AND when it is needed (Bank Draft)and arranges an appointment to sign the necessary documents (usually a couple of weeks before the Closing Date)
Signing Day - reviews the whole transaction and documents with the Buyers and attends to the signing of all documents (usually a couple of weeks before the Closing Date)
Cash Shortfall - is usually received on the Signing Day, however can sometimes be delayed. The Cash Shortfall must be with the Buyer's Lawyer BEFORE the documents are sent to the Land Title Office for registration. When the documents must be sent for registration is a function of how far behind the Land Title Office is. As I write this, they are nine business days behind, a week earlier they were three days behind.
ensures Property Insurance is obtained
Confirmation between the Buyer's Lawyer and Seller's Lawyer as to which "Closing Technique" will be used. See On Time Closings
forwards the Transfer of Land and Mortgage for registration
obtains confirmation of registration and advised the Buyer, Seller's Lawyer and Realtors that the "Deal" has registered. (on the Closing Day)
See also the section below on "Possession of the Property" and "Reporting on the Transaction".

3. WHAT DOES THE SELLER'S LAWYER DO?

reviews the Instruction Letter and Contract
contacts the Sellers, confirms acting for the Sellers, confirms personal details, discusses any preliminary issues raised by the Contract, opens Sellers file (very soon after Instruction Letter and Contract arrive)
orders a copy of the Title and details of Mortgages that the Seller must discharge
Contacts Mortgagees for discharge amounts and per diem rates of interest
prepares the conveyancing documents including Transfer of Land and Statement of Adjustments
arranges for the Sellers to come in to the Office (usually a couple of weeks before the Closing Date)
Signing Day - reviews the whole transaction with the Sellers, attends to the signing of all documents and advises the approximate amount due to the Sellers from the sale of the Property. See Seller's Calculator (usually a couple of weeks before the Closing Date)
forward the conveyancing documents to the Buyer's Lawyer on the appropriate undertakings
Confirmation between the Buyer's Lawyer and Seller's Lawyer as to which "Closing Technique" will be used See On Time Closings
obtains confirmation of registration from the Buyer's Lawyer and advises Seller of closing of the transaction (on the Closing Day)
See also the section below on "Possession of the Property" and "Reporting on the Transaction".

There is a constant interaction between the Buyer's Lawyer and Seller's Lawyer, their staff and others involved in the transaction in order to ensure that a Real Estate Transaction completes smoothly and on time.

C. Possession of the Property:

However the Closing is done, be it a Normal Closing, Cash Closing, Protocol Closing or Title Insurance Closing, there will come a point in time when the Closing has been completed and now the Buyers wants Possession of the Property.

WHAT HAPPENS ON THE POSSESSION DATE?

The Buyer's Lawyer has determined that he has satisfied the Seller's Lawyer's Undertakings or can satisfy them and that it is now appropriate to give the Buyer possession of the Property.
The Buyers and Buyer's Realtor do a "Walk Through" of the Property to determine that the Property is as contracted for in the Contract. If there is an issue, then a suitable "holdback" is negotiated which will be released to the Seller once the problem has been remedied.
Assuming the Buyers are now satisfied, they advise the Buyer's Lawyer that they are satisfied.
The Buyer's Lawyer delivers his Trust Cheque to the Seller's Lawyer in the amount of the Cash to Close, less any holdback and advises that it is appropriate to RELEASE THE SALE PROCEEDS to the Sellers.
The Seller's Lawyer then advises the Seller's Realtor to RELEASE THE KEYS to the Property to the Buyers.
See also the section below on "Reporting on the Transaction".

PLEASE NOTE: There can be many variations on the foregoing respecting the issues of Possession of the Property, release of the keys and the Walk Through, however the foregoing is the "normal" sequence of events.

D. Reporting on the Transaction:

Now that the Real Estate Transaction has closed, each of the Buyer's Lawyer and Seller's Lawyer must report to their respective clients and others involved in the transaction.

BUYER'S LAWYER:

Prepares a reporting letter to the Buyer advising that the transaction has completed and provides the Buyer with a copy of all of the relevant documents.
Prepares a reporting letter to the Lender advising that the transaction has completed and provides the Lender with a copy of all of their relevant documents including the Mortgage.

SELLER'S LAWYER:

Prepares a reporting letter to the Seller advising that the transaction has completed and provides the Seller with a copy of all of the relevant documents.
Pays the balance of Commission to the Realtors
Forwards sufficient funds to the Seller's Mortgagees to payout and have discharged the Seller's Mortgage.