Real Estate Talk:
The notary – process and cost
The notary’s role and responsibilities in residential real estate transactions
By Joseph Marovitch
Definition of a notary by Wikipedia:
A notary is a person authorized to perform acts in legal affairs, in particular, witnessing signatures on documents. The form that the notarial profession takes varies with local legal systems. In Quebec, our legal system is the civil code. Documents are notarized to deter fraud and to ensure they are properly executed. An impartial witness (the notary) identifies signers to screen out impostors and to make sure they have entered into agreements knowingly and willingly. Loan documents including deeds, affidavits, contracts, powers of attorney are very common documents needing notarization.
In the process of selling a residential property, a notary is required to process and register the act of sale. The notary is required after the following has occurred:
- A promise to purchase has been accepted.
- All conditions of the offer, such as inspection and financing, have been satisfied.
Following the last condition in the promise to purchase being satisfied, all documents are provided to a designated notary, usually chosen and paid for by the purchaser. Sometimes, there are fees to be paid to the notary by the seller such as in the radiation of a mortgage or for the purchase of title insurance.
Documents are notarized to deter fraud and to ensure they are properly executed. An impartial witness (the notary) identifies signers to screen out impostors and to make sure they have entered into agreements knowingly and willingly.
The documents provided to the notary by the seller include but are not limited to:
- Deed of ownership
- Certificate of location
- Municipal and school tax
- Promise to purchase
- Counter proposals, if any
- Amendments to the offer, if any
- Identification documents of all concerned parties
The notary will examine all the documents. The notary will then check for any infringements to the property, such as servitudes (a right of a neighbour or utility service, to access a landowners property), real rights (a right an individual or corporation has over the property due to a debt owing or access by an individual allowed by law and granted by the present owner in a previous notarized document), illegal views, unpaid taxes or services to the property.
Once the notary has resolved all infringements and verified all documents and identifications, a deed of sale, stating but not limited to the following, is provided:
Who is selling – Who is purchasing – What they are purchasing – The price of the purchase – Servitudes, if any – Date of the purchase
Prior to the actual signing, the notary will convene with the buyer and seller to provide a draft of the deed, along with an adjustment sheet and a statement of disbursements. The adjustment sheet will contain amounts pre-paid or unpaid by the seller for municipal tax, school tax, electricity bill, oil bill, etc. If the seller paid the full invoice for any service in advance, then the buyer must reimburse the seller. If the seller did not pay the full invoice for any service and has already used the service or product, then the seller must reimburse the buyer.
I always recommend the seller, buyer, listing and selling broker, receive a copy of the draft deed, adjustment sheet and disbursement sheet a few days prior to the signing for examination. This will avoid surprises at the signing that can lead to disagreements and delays.
The disbursement document indicates invoices that must be paid from the funds the seller receives, for the service of the notary and real estate agency, if one is used, and titles insurance if required, and any other fees payable or withheld.
If all parties are in agreement with the deed, adjustment sheet and disbursements, all forms are then signed.
The notary then registers the deed of sale with the city the property is located in. Once the notary registers the document, it takes the city 24 to 48 hours to process. Once the process is complete, the buyer owns the property free and clear.
The cost for notarial services can range from $1200 to $2200 depending on the experience of the notary and the work they must perform. I always recommend the seller, buyer, listing and selling broker, receive a copy of the draft deed, adjustment sheet and disbursement sheet a few days prior to the signing for examination. This will avoid surprises at the signing that can lead to disagreements and delays.
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State of the market
Residential sales for July increased by 46% in Montreal according to the Quebec Professional Association of Real Estate Brokers. This is great news but it does not forecast where the market will be in September. The current buyers are people who were stopped in their tracks when real estate brokerage was halted due to COVID-19. One indicator that the market is unsteady is the fact there are many more buyers but limited amounts of property to sell.
The current situation is urgent buyers, very low interest rates and limited inventory, creating a seller’s market, for the moment. The Quebec government is easing restrictions, allowing bars, restaurants, movie theatres, concerts, and sports events to take place with a maximum of 250 participants. The message the public is receiving is that everything is much better. This is causing people to let their guard down.
‘The current buyers are people who were stopped in their tracks when real estate brokerage was halted due to COVID-19. One indicator that the market is unsteady is the fact there are many more buyers but limited amounts of property to sell.’
The international Center for Disease Control (CDC) announced last week that unequivocally, every city in the world where the public let their guard down, the virus returned with a vengeance. The CDC also stated that children are not immune and over 100 children in the US are now infected. The children may not show symptoms but they are excellent carriers that can infect the adults around them. Quebec is urging children to go back to school with precautions but no masks in the classrooms. By September 15 we should have a good idea where the real estate market will go along with our own futures.
Stay safe and have a great weekend!
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Joseph Marovitch has worked in the service industry for over 30 years. His first career was working with families from Westmount and surrounding areas, hosting children between the ages of 6 to 16 as the owner and director of Camp Maromac, a sports and arts sleep away summer camp established in 1968. Using the same strengths caring for the families, such as reliability, integrity, honesty and a deep sense of protecting the interests of those he is responsible for, Joseph applies this to his present real estate broker career. Should you have questions please feel free to contact Joseph Marovitch at 514 825-8771, or email@example.com