If you're shopping for a new home (or hoping to sell your own), you may be anxiously watching the local real estate market to determine comps, calculate interest rates, and debate purchase prices. You may not put much thought into the regulations governing your real estate agent, or the logistics of the closing. However, there are a few new laws that could impact the back-and-forth of the purchasing process, as well as help make your closing much more streamlined. Read on to learn more about some recent changes to Ontario real estate laws that will likely affect your upcoming transaction.
Electronic signatures now permitted
Before July 1, 2015, all title and mortgage documents were required to be signed by hand, in ink, to be legally valid. Although some title companies employ a notary who can travel to you (minimizing the inconvenience of having to take time from work to go sign closing documents), generally this transaction took place in the presence of both parties or their respective agents. Scheduling a closing could be difficult when coordinating with multiple schedules, and you might find yourself paying to rent a storage unit during the time between your former home's sale and your new home's closing. However, now electronic signatures are just as valid as handwritten ones, allowing closings to take place at your convenience -- or even online. If you're planning to both sell your home and purchase a new home, this can make the process much easier and less time-consuming.
Changes in the way offers are communicated
Whether you're using a real estate agent to sell your home or negotiate for the purchase of a new home, you're likely relying on this agent to communicate offers (or potential offers) to you as quickly as possible. If you're in a particularly hot local market, you may want daily updates from your realtor as to potential prospects of an offer or a counter-offer. However, this eagerness to be apprised of information can sometimes backfire -- some potential buyers will verbally submit false or "bully" bids at much higher than asking price in an attempt to raise the minimum sales price on the seller's behalf, or to get other potential buyers to back down (and then swoop in and purchase the property at a lower price later). Acting too quickly can cause you to lose your shirt in a real estate transaction if you later find out you've been duped by a bully bidder.
However, a new law has been enacted that is intended to help eliminate these falsely inflated bids by requiring all offers to be communicated in writing. This means that your realtor can't verbally notify you about any offers on your home until he or she has received a document to that effect, nor can he or she verbally make a last-minute offer on your behalf. Those found to be in violation of this law can be fined or subject to other civil penalties, including the stripping or suspension of their real estate license.
While this can help protect you against bully bidders, it may also put you at risk of missing the opportunity to place an offer on your dream home. And because offers and counter-offers often have a fairly brief expiration date, if there is a breakdown in communication between you and your agent, you may not receive an offer in time to act. Maintaining open lines of communication with your agent is key to a successful real estate transaction, as well as ensuring that you both have a mutual understanding of the other's availability and willingness to be contacted during certain hours.
You can click here for more information on the changes in real estate law by getting in touch with a real estate agent.