Closing Delays and How to avoid them

Whether you are buying or selling a property, it’s important to understand that there can be delays in a real estate closing. A closing delay is something you want to avoid. There are several reasons possession may not be possible on the date you have on your purchase agreement. Sometimes upexpected or negleted items occur and nobody wants to be left homeless on their possession date.

REALTORS® are aware of these delays (because we don't get paid until after possession day), we help our clients avoid closing delays for a smooth transaction and a happy buying and selling experience. Below is a list of possible closing delays.

You choose the wrong lawyer

Not all lawyers are familiar with real estate transactions and this can cause delays in the transfer of title. At EdmontonHousesAndHomes, we encourage our clients using real estate lawyers.

Unreal closing dates

Unlike other provinces in Canada, Alberta's land title transfer process begins prior to you meeting with your lawyer. In the province of Alberta, it takes time to process a the title of a property to another person. This time frame will vary according to the market and land titles processing time. As a rule of thumb - a good closing date is 1-2 months after you write your offer to purchase.

Your bank revokes your mortgage

Yes. This does happen. The bank has the right to secure their mortgage and in the event that something changed, such as a job loss or the buyer also purchased a vechicle, changing their debt-ratio, the bank can pull your mortgage. REALTORS® will remind their clients not to make any big purchases until they recieve their house keys.

Real Estate Appraisal Issues

Sometimes (usually in a busy market), the bank did not send out the appraiser prior to telling you your mortgage has been approved. If the property does not appraise out at your offer price or higher, the bank can refuse to forward funds, the seller will need to reduce the price of the property or the buyer must come up with the diffence between the offer price and the appraised value.

Terms or contingiencies of the contract

If you have a walk through term written into your agreement and you find out the terms after the contract have not been fullfilled, this can be considered a breach of contract. These items could be as simple as the seller removing the dog feces in the back yard to more substantial issues such as a builder not finishing the completion or repairs. It is always best to have a walk through clause written into the offer prior to the buyer removing their conditions.

Problems with the title

Edmonton REALTORS® are obligated to pull title when they are writing an offer to ensure the persons selling the property is correct as well as ensuring there is enough equity in the property to be sold. Sometimes, prior to closing, after conditions have been removed, the seller has taken out a second or third mortgage and there is not enough equity to close. If this happens, there is major liablity issues that your lawyer will discuss.

The RPR does not have compliance

In the REALTORS® purchase agreements, there is a cluse reguarding the real property report and compliance which the seller has signed and agreed to. In the event the seller does not have compliance, there is an issue. A common one is when the seller has change the deck or a non-movable shed had been added to the property.

Homeowner insurance is not secure

The buyers lawyer will ask the buyer to bring in the insurance binder. This is basically a peice of paper saying the buyer has insurance on the property. If there is no insurance, the bank can not forward the mortgage funds.

Closing costs

If either the buyer or the seller does not have enough cash to close, there's a problem. Read more on closing costs.

Unclear terms

When writing an offer to purchase, the terms, conditiond, amendments and addendums must be crystal clear to avoid misunderstandings. The interpatation of the buyers lawyer may not be the same as the sellers lawyer. If the written phrase is not cytal clear, have your REALTORS® re-write it in lamens terms.

The buyer changes their mind

During the last Edmonton real estate crash, we seen this happen often due to the crashing real estate prices and buyers did not want to pay the agreed amount when the value of the property had substantially decreased. In our REALTORS® contracts, there are items put in place with the consequnces of such action. To avoid this in a soft market, be reasonable with your negotitaions. - The buyer can walk away.

The seller is unable to vacate on time

Alberta REALTOR® purchase contracts state that the property must be vacant by noon on the day of possession. However, sometimes the seller is still in the property due to circumstance beyond their controll. If this happens, it is a breach of contract. The best thing do is take your lawyers advice, there is some conpensation.

Not working with a qualified REALTOR®

The majority of Edmonton Remax REALTORS® have closed hundreds and hundreds (some have closed thousands) of real estate transactions. Using an experienced REALTOR® can be the differnce between being homeless and a seemless closing.

We pride ourselves on helping our clients with a smooth real estate transaction and a great buying and selling experience. If you or thinking about buying or selling and need experienced Edmonton Remax REALTORS®, email us. We are here to help.

How to Fire Your REALTOR®

There are a few reasons you may want to fire your REALTOR®. If you feel you made a mistake by signing a listing agreement with the wrong REALTOR®, the best thing to do is to correct it and move on. If your Lawyer or Doctor was not working in your best interest, wouldn't you fire them too?

Your listing agreement is usually for a period of three to six months (sometimes longer) and you are entitled to cancel at any time. This can be done with a standard Alberta real estate form. Edmonton REALTORS® (depending on the agency designation) also has the option of terminating the listing contract at any time without your consent, but this rarely happens.

If you have hired the wrong real estate company or agent to represent you, fire them. Do it professionally and do it in writing. There are a few things to consider prior to firing your Edmonton REALTOR®. All of these contingencies will be set out in your original listing agreement.

Who owns the listing?

The listing is owned by the brokerage, not the REALTOR®. If you have a problem with the agent, call the broker. If you have a problem with the broker, call consumer affairs and the Edmonton Real Estate Association.

Is there a fee to cancel your listing agreement?

There may be a cancellation fee in the listing agreement. This fee is usually the cost to cover expenses already paid by your Edmonton REALTOR® prior to your cancellation. The service fee amount will be set out in the agreement you signed. However, if you paid a fee upfront, there usually is no cancellation fee.

Will I still have to pay a commission after I fire my REALTOR®?

If a buyer was introduced to your home during the term of your listing agreement and you sell it privately (during a specified time in the agreement) to that same buyer, commissions will be payable.

Can I hire another agent immediately?

Yes. Once your home is off of the market, you are free to list your home with any licenced real estate agent.

When you are ready to fire your REALTOR®, simply inform your agent that you would like to cancel the listing and ask him to provide you with the listing cancellation form. There will be two choices on this form. Make sure you have a property termination end date, the office broker (not the agent) has signed and you have received a copy.

1. Unconditional termination

• Which allows no further obligations for either the seller or Realtor

2. Conditional Termination

• Your agreement will end on the termination date but your obligations will continue under the terms of Section 10 of the Exclusive Seller Representation Agreement. There may also be an additional term.

If your Edmonton REALTOR® fails to provide this form within a timely matter, contact their brokerage and tell them about your grievances with the agent.

Can you fire a Buyers Agency or Buyer REALTOR®?

Yes. It is a different form, but you are free to fire your REALTOR® when buying. There may or may not be a small fee to get out of the agreement. This fee would have been set out in the original buyers brokerage agreement which states: If you change your mind about looking for a property, you must tell us in writing. You must reimburse us for our reasonable expenses up to the time you tell us. Reasonable expenses will include: (If this section is blank - no penalty will be payable). However, this does not allow you to approach a seller that has been introduced to you while working with your realtor. If you do this, you will have to pay a full commission as set out in the original buyer brokerage agreement.

If you have any questions, both RECA (the Real Estate Council of Alberta) and EREB (the Edmonton Real Estate Board) have plenty of great information to help you make the best decision for you!

Have questions about firing your REALTOR®, feel free to reach out. We are here to help.

What is a Real Property Report?

A Real Property Report (also known as the RPR) is a legal document that clearly illustrates the location of significant visible improvements relative to property boundaries. It is a plan or illustration of the various physical features of the property, including a written statement detailing the surveyor’s opinions or concerns.

Who needs a Real Property Report?

Part of the standard real estate contracts in Alberta will have a term in the document states the seller will provide a current real property report with the compliance report to the purchaser upon closing. Prior to putting your home on the MLS System and/or Realtor.ca, Sellers should order a new RPR to protect themselves from potential future legal liabilities resulting from problems related to property boundaries and improvements. Your REALTOR® can assist you with this process to ensure your property complies with municipal requirements.

Do I need a Real Property Report for a Condominium?

Bareland Condominiums require Real Property Reports. Conventional Condominiums do not require an RPR.

How does a Real Property Report protect you?

Purchasing a property may be the largest financial investment you ever make. With a Real Property Report, owners are aware of any boundary problems. They know whether their new home is too close to the property line, or part of their garage is on their neighbour’s land or vice versa. Since legal complications may occur if a sold property fails to meet requirements, a Real Property Report protects the seller.

What is on a Real Property Report?

The legal location description of the property and municipal address, dimensions and directions of all property boundaries, any improvements on the property, right-of-way or easements, any visible encroachments, a duly signed certification and opinion by an Alberta Land Surveyor and a permit Stamp where applicable.

How much does a Real Property Report cost?

The amount of work to prepare a Real Property Report varies between properties. Lot size and shape, number of buildings, natural features, age and availability of the property boundary information all affect the cost. However, if you are planning on selling your home in the near future, the sooner you order your Real Property Report, the more economical it will be plus any problems can be identified and resolved before a sale is finalized.

Should you get title insurance in lieu of a Real Property Report?

Title insurance is not a replacement for the RPR. There are item which are not covered and could be a concern at a later date... read more on title insurance