From making the offer to getting the keys
Whether you're a first-time buyer or seasoned investor, understanding each phase is crucial. Please note, this guide offers informational insights, not legal advice. For personalized legal assistance, we're here to help once we establish an active file for you. Stay tuned till the end for definitions of frequently used terms.
Before Viewing Properties
Determine your budget: Consider both the purchase price and your ongoing monthly expenses.
Think about the purchase price and your monthly budget
Budget for All Costs: Include mortgage payments, utilities, property taxes, maintenance and repair expenses, and, if applicable, condominium or homeowner’s association fees.
If this is your first time buying, consider asking people with similar properties how much they have spent since buying their property, so you can have a realistic idea of costs. Maintenance/repairs are often something that people forget to budget! Even if you are buying a condominium, there may be work that needs to be done within the unit at your own expense.
Make sure to view properties in your price range. Keep in mind that you will need funds for closing costs on top of your down payment. Use our real estate calculator to estimate closing costs
Putting in an Offer
Deposit Requirements: To have your offer accepted, you usually need to provide a deposit of $10K (deposits can vary from $5-30K, typically depending on the purchase price).
Speak with your realtor about how to arrange for this deposit to be provided. The deposit is provided to the seller’s brokerage who will hold it in trust. If conditions are not waived (you decide not to proceed), you have to arrange with your realtor to get your deposit back. If conditions are waived (you proceed with the purchase), this deposit will be credited to you and reduce the amount of funds that you have to provide to the seller as part of the statement of adjustments.
Document the Property: Make sure to take lots of pictures of the property and keep screenshots of the listing. These pictures will help to provide what the condition of the property was at the time that you put the offer in.
Consider any special terms that you want:
Your realtor should assist you in preparing these terms. In a seller’s market with multiple competing offers, you may be better off not putting in extra terms. Offers with fewer special/extra terms are more likely to be accepted by sellers.
Examples of terms to consider:
Professional cleaning or carpet cleaning
Repairs or changes requested
Items that you want the seller to leave, such as garage openers, key fobs, any items of furniture or removable items that you want to keep (TV mount, gazebo, shed, etc)
Access 24 hours before closing/possession for a final walkthrough
Specific terms should likely have:
Enough specificity to be enforceable (identify the specific action/location)
Consider what conditions you want on your offer or if you will make an offer without conditions.
Common conditions are: house inspection, financing, condominium document review, and the sale of your current property. Your realtor should assist you on what conditions are necessary and how best to proceed.
Conditions Period
This is only applicable if your offer has conditions. If you made an offer without conditions, this does not apply.
Make sure to immediately take steps by getting your financing, home inspection, and any other conditions started right away. Consult your realtor for assistance. They will arrange with the seller’s realtor to get access to the property for the inspection and appraisals.
Contact your broker/bank right away to get approval. They will generally require an appraisal for the value of the property before approving. Appraisals can take some time to get scheduled, so make sure that they start right away.
The seller is not required to give you any extensions so make sure you give yourself enough time for conditions. In general, a reasonable time period is 10-14 days. This gives you enough time to get an inspector and mortgage approval.
If you do not complete your review of conditions and the seller refuses to give you an extension, then your offer will expire. You can get your deposit back, and the seller can accept other offers.
After conditions waived
(when JKB Law opens a file for you)
Most lawyers will open a file for you after conditions are waived (or if there are no conditions, when the offer is accepted).
The reason for this is that sometimes you may not decide to proceed with a purchase and we would be opening/closing files unnecessarily. At this point, you have a firm offer, which means that you cannot change your mind.
Let us know as soon as you have a firm offer, so we can open a file for you and ensure that we have capacity/time to take your file.
We only take files that we have time to provide full attention to completion. Contact us as early as possible.
Let your realtor and mortgage/lender know who is your lawyer so they can send instructions.
Once we have mortgage instructions, we can set up an appointment for signing paperwork and receiving funds from you for your purchase.
Insurance
For houses: you must have fire insurance for the property.
Most lenders/mortgages require having insurance that is the equivalent of the value of the mortgage OR guaranteed replacement cost.
The reason for this is that the lender/bank will want to know that if anything happens, their mortgage funds are covered.
We recommend guaranteed replacement cost generally because you will want your house rebuilt if it burns down.
For condominiums: you must provide us with the insurance certificate.
You will usually receive this as part of your condominium document review.
It is strongly recommended that you have condominium unit owner insurance, which covers you for deductibles and what the condominium insurance does not cover.
JKB Law is unable to advise on insurance, only on what the lender requires - seek the advice of a specialist such as your insurance broker.
Funds required for your purchase
We will provide you with a total of funds required which includes the rest of your down payment, adjustments for property taxes, and closing costs. At JKB Law, we will overestimate the funds required so that if there are any delays and late interest is owing, we are prepared and do not have problems with closing over a small amount like $100.
The funds must be provided by bank draft or wire transfer (if it is less than 5 business days before closing, then we require wire transfer).
Signing appointment with JKB Law
As of the time of posting this blog, the Alberta Land Title Office requires that most paperwork, including mortgages, must have “wet” ink signatures (physical, not digital).
If you will not be in Calgary before your closing/possession date, please inform us as soon as possible so we can make arrangements for remote or video signing.
Set up utilities/condo fees in your name from the closing/possession date.
You can choose any utility company that you wish. There are several, so do your research and find the best fit for you.
If you are buying a condominium, you can contact the property management company to set up condominium fees in your name.
Wait until after closing/possession day to deal with property taxes
Your lawyer will advise you on the adjustments - depending on the time of the year and whether they are paying monthly/annually, there will be adjustments for property taxes made so that the buyer/seller are only paying for the part of the year that they own the property.
24 Hour Walkthrough
Most offers will include a final walkthrough 24 hours before closing/possession. If there are any issues at that time, your realtor should begin the negotiations with the seller’s realtor. Take pictures and send a clear email of the issues to JKB Law.
Closing/Possession Day
Do not book anything for the closing/possession date. Although you should receive the keys at noon, delays are common (often due to issues at the walkthrough or delays in funding from lenders). Therefore, it’s best not to plan for anything.
Schedule movers, cleaners, internet installers, etc., for late in the day or, preferably, the day after closing/possession.
We will update you once funds have been sent to the seller’s lawyer, so you know that keys should be released. Additionally, we will send you an initial update email with next steps for you and an update on the current land title processing timelines.
After Closing/Possession Day
JKB Law will send all the documents to transfer the title in your name and if applicable, to register your mortgage.
Alberta Land Title Office timelines for registration vary between weeks and months, depending on the circumstances at the time.
Once the title registration is completed, we will send you an update with the new title in your name, finalize billing, and send you the rest of any extra trust funds.
Phew - that’s a lot! Now you have made it to the end of the process and you are the proud owner of your new property! Congratulations!
Check out our real estate calculator for a quote now!
Glossary (Commonly Used Terms):
Conditional offer: the conditions have not been waived yet
Conditions Waived: refers to when you remove the conditions on your offer (common ones are financing and home inspection), which means that the sale is firm. If you do not close now, you will break your contract with the seller, and they can sue you for damages.
Firm offer or firm sale: when conditions are waived, or if there are no conditions when the offer is accepted, your purchase is considered firm. If you fail to complete the deal now, the seller can seek costs against you.
Closing Day also known as Possession Day: is the date that you get possession and the contract “closes.”
Brokerage: this is the company that every realtor is attached to - the brokerage takes care of holding trust funds (deposits) and providing realtor instructions
Seller’s agent or listing agent: this is the realtor who represents the seller
Buyer’s agent or selling agent: this is the realtor who represents the buyer
Statement of adjustments: prepared by the seller’s lawyer, this will adjust the purchase price by the deposit, property taxes, and any other applicable expenses such as condominium fees. Either the buyer or the seller will get credit on the adjustments, and the final amount is the cash to close
Cash to close: funds required from the buyer to the seller’s lawyer, which is usually a combination of mortgage funds and their own funds