What are the costs associated with the deed of sale?
Your real estate transaction is nearly complete. A few weeks after signing the purchase agreement, you will need to sign one last form: the deed of sale.
Sometimes called a "bill of sale," this document, signed by the seller and the buyer, needs to be notarized. It finally concludes the property exchange.
Of course, the preparation of this document is not free. You will need to pay more or less, depending on what the notary has to do to draw up the document. Read on to find out more about the costs associated with the deed of sale.
What is the deed of sale of a property?
The deed of sale can be described as the contract that completes a real estate transaction. It is what formalizes the transfer of the property from one owner to another. It is usually preceded by a promise to purchase, which the seller and buyer have previously agreed on.
Once the promise to purchase has been signed, the document is sent to the notary in charge of the transaction. The notary then prepares the official document after carrying out numerous preliminary checks and investigations to verify the validity of the information concerning the property.
When the deed is signed, the transfer of ownership from the seller to the buyer becomes effective immediately. This is the long-awaited moment when the seller hands over the keys to the property to the buyer, who can then enjoy the property.
What information is included in this document?
The deed of sale must contain information and contact details for both parties: the seller and the buyer. It must also contain all the information related to the property in question, including:
- Cadastral number;
- Detailed description of the property;
- Ownership history;
- Encumbrances affecting the property (easements, mortgages, etc.).
The deed of sale also contains the terms and conditions of the sale, i.e., the amount of fees, the sale price, the terms of payment, the date on which the property is made available, and so on. It also includes the declarations by the seller of the immovable and the property transfer tax that the buyer has to pay to the local authority.
If the property is a condominium, the deed of sale must also contain all the information relating to it (building rules, etc.).
Deed of sale costs
Once the deed is signed, you will have to pay transaction costs and notary fees. These costs are divided between the buyer and the seller according to the actions and corrections required by the notary.
In Quebec, the buyer is responsible for paying most of the costs and notary fees associated with a property sale.
The buyer is responsible for the costs associated with the title search, preparation and registration in the land register. These costs (which do not include notary fees) average between $450 and $500 per file. They may include:
- Registration of the deed in the land register;
- Registration of address notices;
- Fees for inspection and copies of building records, plans and deeds in the land register;
- Fees for the use of an electronic platform for the transmission of mortgage mandates;
- Trust account management fees.
Costs payable by the seller
The seller will be responsible for the cost of cancelling any existing encumbrances and correcting any inaccuracies in the title deeds (if necessary). Depending on the circumstances, the costs to be paid by the seller can vary greatly. They may include:
- Registration of irregularities in the land register;
- Registration of deeds of release or discharge of existing encumbrances;
- The cost of obtaining a copy of the declaration of co-ownership, divorce decree or any other document not in the seller's possession;
- The cost of obtaining municipal and school tax statements;
- Trust account management fees.
The total costs to be borne by the seller can vary greatly from case to case and it is very difficult to estimate them in advance. If no corrections or additional operations are required, the seller will pay very little. The notary will not be able to estimate the fees to be paid until he has examined the property titles and verified that they are in order.
The role of the notary in signing the deed of sale
The notary is the only professional who can draw up the deed of sale and have it signed by both parties. Once the document has been prepared by the professional (usually the buyer's notary), the buyer and seller are invited to come and sign it.
Before presenting the deed of sale, the notary must carry out several searches and checks to ensure that everything is in order. The purpose of these checks is to protect everyone involved, seller and buyer alike. They include checking the title deeds, the certificate of location, the payment of taxes, the rights affecting the property, the identity of the parties, and so on.
The notary in charge of the deed has the same duty to the seller as to the buyer. His professional obligations require him to be impartial. You can therefore trust him in all circumstances.
Once signed, the document is kept by the notary. Both the buyer and the seller leave with a certified copy of the deed. For the buyer, this copy represents the title of his new home, which he can finally enjoy.
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