Residential Real Estate Sales - The Process
GENERAL INFORMATION FOR SELLER(S) OF RESIDENTIAL PROPERTY
The following is for general information and is designed to outline the typical steps that will be taken in connection with the sale of your property, and to clarify the role of seller's solicitor. Each transaction is unique, and the following is intended only to provide general information on the usual process involved in selling a residential property in Alberta.
The following discussion assumes that you have engaged a licensed Realtor to act on your behalf. If you are selling your property without the assistance of a Realtor, we can provide assistance in drafting a Contract and with other services typically provided by the Realtor.
The Contract
The document which controls many of the steps involved in the purchase and sale of the property is the Real Estate Purchase Contract (there are “standard” Alberta Real Estate Association forms typically used) which you have signed. While many of the terms are standard, each transaction will have specific conditions written in. If you have not yet signed a Contract, and you wish to have it reviewed, we can assist with that. Once the Contract is signed by both parties, very little can be done to change any terms agreed to. Also, municipality in which the property is located, the nature of the property and many other factors will affect the details of how the transaction proceeds. Particulars of your transaction will result in some variation of the general process described below. It is the Contract that establishes the terms and conditions upon which the transaction is to be completed. In the event that the Contract does not deal with a particular concern which you might have, or if any revisions to the Contact are required, please advise us immediately.
In addition to the terms of the Real Estate Purchase Contract, Alberta real estate practice involves the use of "trust conditions" between the solicitors acting on behalf of the seller(s) and the purchaser(s). Essentially, these are "rules" imposed by one solicitor and accepted by the other to facilitate the completion of the transfer of ownership of the property. There is additional information on trust conditions below.
What You Need To Do
We recommend that prior to accepting an offer and executing the Contract to sell your property, you first obtain a Real Property Report and apply for and obtain a Certificate of Compliance from the appropriate municipality. This is not needed for condominiums, unless the condominium property you own is a "bare land" condominium. Your realtor should be able to assist with this, or you can contact any licensed Alberta Land Surveyor for pricing. The reason we prefer that you obtain this prior entering the Contract is that if there are any issues that are disclosed, they can be dealt with before you have entered to the Contract with the purchaser(s). If you have an existing Real Property Report (perhaps from when you purchased the property), you may be able to use that, as long as there have been no changes to any structures since the date of the existing Report. There is more information on Real Property Reports below.
Once you have accepted and signed an offer to purchase your property (i.e. the Contract), advise your realtor that we will be acting for you to complete the transaction. When conditions are met or waived, the realtor will forward us the information we require to complete the transaction.
Also, you will need to ensure you have the following:
The up to date Real Property Report with municipality compliance stamp or letter. See discussion below. Failure to have this available may delay or even jeopardize your sale. (This is usually not required for condominium property unless it is a “bare land” condominium)
Loan or mortgage account number(s) for any registered mortgages or credit facilities to be paid out of sale proceeds
Transfer Of Title
Once retained, we prepare the documentation required to transfer title to the subject property from you to the purchaser(s). You should be prepared to meet with me or my assistant approximately eight to ten days prior to the possession date for the purpose of signing the transfer documents. When documents are ready, I will contact you to arrange for a mutually acceptable time when we can meet to sign the documents. Original documents are required as the Land Titles Office will not accept copies or scanned signatures.
Please advise us immediately if you are not now a resident of Canada, or if you will cease to be a resident of Canada within 60 days after possession date, as sales by “non-residents” raise additional concerns which must be promptly addressed.
Trust Conditions
Real estate conveyancing in Alberta is done pursuant to trust conditions agreed upon between the solicitors representing the seller and purchaser, respectively. Trust conditions are used in order to facilitate the transfer of title and the advance of funds with a minimal amount of inconvenience, while providing the required degree of security for both parties. It is important to realize that the use of trust conditions may represent a modification of the mechanism for transferring title and discharging non-assumed encumbrances set out in the Contract. If you have any questions or concerns in this regard they should immediately be brought to our attention.
When the Contract contemplates the purchaser obtaining mortgage financing to assist with the purchase of the property, the usual method for dealing with this situation in Alberta is to permit early registration of the transfer, provided that:
the difference between the cash to close and the net mortgage proceeds has been forwarded to the seller’s solicitors;
a "transfer back" in favour of the seller has been signed and is held in trust by the solicitors for the purchaser;
an irrevocable assignment of the net mortgage proceeds to the seller’s lawyer has been signed; and
if possession is to be given prior to the payment of all funds, a tenancy at will agreement has been executed.
In many cases the closing process can be done in a streamlined manner using the Western Law Societies’ Conveyancing Protocol. More information on the Protocol can be found here: 
https://www.lawsociety.ab.ca/resource-centre/key-resources/substantive-legal-knowledge/conveyancing-protocol/ .
In some cases closing is done using title insurance. If this applies to your transaction, we can discuss this further at the time.
Discharge Of Mortgage Financing
If there is presently a mortgage, registered secured line of credit or other encumbrances registered against your property that will not be assumed by the purchaser, we will be attending to the pay-out and discharge of this mortgage or other encumbrance. We will be corresponding directly with the mortgage company for the purpose of obtaining a discharge statement and to determine what penalties, if any, may be payable by you. If you have a statement or other document showing the mortgage company loan number please forward it to us to assist in getting the payout statement.
Assumption Of Mortgage Financing
If there is presently a mortgage registered on the Certificate of Title to your property that is to be assumed by the purchaser, we will be corresponding directly with the mortgage company for the purpose of obtaining an assumption statement and to determine whether the mortgage can be assumed. The assumption figure provided to us will form a part of the purchase price to be paid and if the exact assumption figure is different from the figure set out on the Real Estate Purchase Contract, an adjustment to the cash portion of the purchase price will be made. If you have not yet accepted an offer to sell your property, prior to doing so, please contact us to discuss the issues that arise when allowing an assumption of your mortgage by a purchaser.
Real Property Report (Non Condominium Sale)
Pursuant to the terms of the standard form real estate purchase contract used by the Alberta Real Estate Association, a seller is required to provide the purchaser with a current "Real Property Report", which is essentially a survey of the property showing the lot, and locations of all improvements, such as buildings, fences, etc. In addition, the Real Property Report must have endorsed thereon evidence from the municipal authority confirming that the location of the buildings and fixtures on the lot complies with local bylaws and that there are no encroachments on utility rights of way or adjoining properties. FAILURE TO PROVIDE THIS IN ADVANCE OF YOUR COMPLETION (POSSESSION) DAY COULD DELAY OR EVEN THREATEN CLOSING.
If you have an existing Real Property Report, provided that there have been no additions or renovations to the exterior of the property since the preparation of the Real Property Report (including fences, garages, etc.), then you will likely be able to use the existing Real Property Report to satisfy this term in the Contract. Otherwise, the present cost of obtaining a new Real Property Report approximates $750, plus the municipality fee for application of confirmation of compliance with municipal bylaws. We will need you to provide us with a current Real Property Report at least two weeks prior to the date when your sale is scheduled to close. The foregoing comments are not applicable to condominiums (except “bare land” condominiums).
Estoppel Certificate and Certificate of Insurance (Condominium Sale Only)
If you are selling condominium property, you are responsible for obtaining from the condominium corporation and providing to me an Estoppel Certificate and Certificate of Insurance. Your condominium corporation will normally charge a fee for this service. We normally order and pay for that and recover the cost from the sale proceeds.
Automatic Mortgage And Tax Payment Plans
You should ensure that any automatic mortgage or tax payment plan is terminated after payment of the last payment for which you are responsible. We will adjust the sale price for any payments made that cover any period after the Completion (possession) Day. Please keep in mind that mortgage payments are always in arrears, for example a payment made on June 1 would be in respect of the month of May.
Insurance
We recommend that you maintain insurance coverage on your property until you have received all the monies due with respect to the sale. We also strongly recommend that you advise your insurance agent of the possibility that the purchaser may be granted possession of your home on a tenancy-at-will basis pending receipt of all of the purchase price payable to you.
Utility Accounts
Utility accounts are not adjusted between the seller and the purchaser. We recommend that you, as seller, contact the utilities companies, close the utility accounts and arrange to have the utility meters read as near as possible to the date of possession.
Adjustment Of Purchase Price
The purchase price for your property is subject to adjustment. Adjustments will include realty taxes and any assumed mortgage. For condominium property, there may also be an adjustment for condominium fees. Certain communities also charge homeowner/amenities fees which are also adjusted for, if applicable. In any event, we will review the Statement of Adjustments with you in detail when you attend and meet to execute documents.
Possession
The practical aspects of obtaining keys and taking possession are normally handled through the Realtors involved with the transaction. If such is not the case, please advise, as keys and automatic garage door openers should not be made available to the purchaser until we have first confirmed that the sale has progressed to the stage where keys may be released.
Realtor's Commission
Any listing or other agreement you have entered into with your realtor will usually provide that the realtor will hold all deposits paid by the purchaser. The realtor will apply the deposit money directly to the commissions and other charges (usually GST) due on closing. Any amounts held in excess of the commissions due will be forwarded by your realtor to my office and disbursed with the balance of sale proceeds. Your listing agreement will also direct that if the deposit is less that the total balance due to your realtor, any shortfall owing will be paid directly from my office to the realtor from sale proceeds.
In the event and to the extent that sale proceeds are insufficient to retire the full amount of the balance owing to the realtor, this will be your direct responsibility. In the event that you do not agree with the information provided by the realtor with respect to the real estate commission payable on this sale, please advise me immediately.
Basic Fees And Disbursements for Residential Property Sale
The base fee in connection with a typical sale is $750. This is a fee and includes all work typically done to complete a “standard” sale with a payout of a single mortgage or registered line of credit. If you transaction requires work in addition to this basic service, additional fees will be applied, based on an hourly fee basis. If you are selling your property without the use of a Realtor, there will be additional legal costs as more time will be required for us to complete the transaction. You should also be aware that you will be responsible for disbursements (out of pocket expenses) in addition to my fees. Some of the more significant disbursements that you can anticipate are estimated as follows (these are approximations only):
(a) Real Property Report, if applicable, approximate $ 750.00
(b) Certificate of Compliance on Real Property Report) $ check with municipality
(c) Land Titles registration fees for mortgage discharge (single): $30.00
(d) Encumbrance and Title Searches (in some cases) $ 30.00
(e) Delivery and miscellaneous charges -- depending on many factors, typically ranges from $30 to $60
(f) Estoppel and Insurance Certificate (condominiums) -- as billed by Condominium Corporation.
(g) Additional Payout(s) (e.g. second mortgage, credit accounts) $50.00 per payout
GST will be added to our fees and to most disbursements.
Fees, disbursements and taxes are deducted from the sale proceeds.
Any quotation of fees is for standard services as outlined above and is based on the assumption that the transaction will not include unusual matters. If unusual matters arise that are likely to increase the costs, I will advise you as soon as is reasonably possible.
A full report and accounting is provided after closing.
The foregoing is intended as a general overview of the transaction the role of seller's solicitor. Each transaction is different and we will contact you further in connection with the particular aspects of your sale. We trust that you find the above to be informative and in the event that you wish to discuss any matters further, please contact us.