Real estate lawyers: what is their role in your transaction? Well, one represents the buyer, one represents the seller and when there is a mortgage, the buyer’s lawyer will also likely represent the bank.
Most deals that fail to close go down at different stages:
- At the point of appraisal
- At the point where all documents are submitted to satisfy mortgage conditions
- On closing
The question is – when a broker originates the deal, whose responsibility is it to ensure that all conditions have been met and information verified?
While the real estate lawyer does have to perform due diligence to protect their clients, much of this due diligence should have been performed by the broker.
Let’s look at some of the real estate lawyer responsibilities:
- To ensure title is clear by performing necessary searches
- To ensure mortgage conditions have been met
- Pay off existing mortgages
- Transfer mortgage documents, etc…
At the point where the real estate sales professional performs the above: should new or different information come up? Should there be a reason for surprises? We think not. Not only should you be gathering information from your client but you should be verifying the information presented too – and it is not difficult.
Clients make mistakes all the time. Some are deceptive, some confused, some may have just forgotten to mention something. It’s not in your best interest to take a client’s word at face value and you should be performing some level of due diligence. While you can’t find online what someone’s current tax bill is or the status of their water bill, you do have access to a lot of the land title data that lawyers have access to.
As you know, Teranet automated the land registry system for the Province of Ontario and offer solutions such as Teraview that lawyers use when performing property title searches and land transfers. While you cannot use Teraview as a broker, there is a solution offered by Teranet to mortgage agents and brokers that offers a lot of the same information as Teraview.
No – you cannot perform a full title search, register and discharge mortgages or transfer titles – but you can still investigate who is on title to a house, sales history, sales comps, registered mortgages and other encumbrances and more…
As a broker it makes no sense for you to wait for a real estate lawyer to discover on closing that someone else is on title to a property that wasn’t disclosed to you; or worse that there are undisclosed mortgages against the property. Nor should you wait for an appraiser or CMHC to tell you that the value on your application simply isn’t there.
By simply performing some preliminary searches you can learn all of this information and more.
Don’t leave anything to chance. Check out http://brokers.purview.ca/index.php to find out all you need to know about Purview For Mortgage Brokers.
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