Forms for Selling Your Home Privately in Ontario
When you are selling your home privately in Ontario, forms need to be filled in, reviewed, and signed with the help of a realtor or real estate lawyer.
As part of selling your home privately in Ontario, forms and various paperwork must be completed. Only one document is essential: the Agreement of Purchase and Sale, which is the legal offer to purchase your home. Other forms may need to be completed and signed as well, depending on your particular circumstances. In addition to hiring a real estate lawyer, it is also advisable to engage a KYC provider company such as Fully-Verified, in order to check the legitimacy of the documents presented to you. These forms may include:
- A Seller Customer Service Agreement. This will give you access to the powerful marketing edge offered by MLS listings and the REALTOR.ca website.
- A Discharge of Mortgage form. Any current mortgages on a property need to be discharged, so that the lender’s rights are removed from the property.
- Two forms presented by a buyer’s realtor. These ensure that the realtor’s commission as the buyer’s agent will be paid:
- Seller Commission Agreement with Co-operating Brokerage for a Listed Property; and,
- Confirmation of Co-operation and Representation.
A good real estate lawyer is an essential expense when you’re planning to sell your home privately. If you have questions or concerns about any of the forms presented to you, and especially in regards to an Agreement of Purchase and Sale, speak with your lawyer.
Agreement of Purchase and Sale
When you’re selling your own home in Ontario, a form that absolutely must be completed is the Agreement of Purchase and Sale. Designed by the Ontario Real Estate Association (OREA), it is often referred to as “Form 100.” A sample can be viewed at the toronto.ca website.
This form is initially filled out by the buyer with help from their realtor or lawyer. Once completed and submitted to you, it is officially an offer to purchase your home.
The Agreement of Purchase and Sale is a complex document with a lot of information, including:
- Names of the buyer and seller.
- A description of the “Real Property,” which should include not just the postal address, but also the lot and plan number, as well as the dimensions of the frontage and depth.
- The price offered.
- Information about the deposit that the buyer included. Typically, a deposit is held in trust until the sale is completed. A deposit is not the same as a down payment.
- Terms or conditions that need to be fulfilled in order for the buyer to complete the purchase (such as the sale of their own home).
- Chattels included and fixtures excluded. Chattels are removable items that may or may not be included in the sale of a home, such as major appliances, window treatments, and small sheds. Fixtures are items or improvements that are fixed in place and would not normally be removed. However, a blog piece by Mark Argentino gives the example of an heirloom chandelier that a seller will want to remove. It’s important to provide clear and detailed descriptions of all inclusions/exclusions.
- The “Irrevocability of the Offer” which is the period of time that the offer is good for.
- The “Completion Date” aka the closing date that the sale is completed.
Once the Agreement of Purchase and Sale is submitted to you, it’s important to take it to your lawyer for review. If you want to make any changes, such as voiding any of the chattels included and fixtures excluded, or if you want to counter-offer with a different price, your lawyer will make the necessary adjustments to the document. If both the buyer and seller can come to a full agreement within the period of time indicated on the document, the agreement becomes legally binding.
Seller Customer Service Agreement
A Seller Customer Service Agreement is only necessary if you want to get your property listed on the Multiple Listing Service (MLS). However, the MLS is a terrific marketing tool that’s easily available to private sellers, and at a very reasonable price.
What is the MLS?
The MLS is a system of interconnected databases that realtors use to share information about properties for sale. Posts to the MLS are fed into the REALTOR.ca website. This website was created by the Canadian Real Estate Association (CREA) specifically as a way to advertise MLS listings to consumers. REALTOR.ca is by far Canada’s most popular real estate website, with over 240 million visits each year. A piece in The Law Times states that about 90% of home resales in Canada are made via MLS listings.
However, only licensed realtors can post to the MLS. The information posted needs to be highly accurate. It must also include legal information about the property that private sellers may be unfamiliar with. As well, the data in the MLS is used by a variety of organizations and professionals, such as government, financial institutions, and appraisers. Licensed realtors have the training to identify and post the type of information that’s required.
Flat Fee MLS Listings for Private Sellers
A private seller can enter into an agreement with a realtor or brokerage for a “mere posting,” or “flat fee MLS listing.” In Ontario, the agreement is made binding by signing a form called the Seller Customer Service Agreement: Commission Agreement for Property Not Listed. A sample of this form is available at the London and St. Thomas Association of Realtors’ website.
At its most basic, a flat fee listing includes the initial posting of a property to the MLS, as well as any required amendments and its removal once the property sells. However, realtors or companies that post listings to the MLS may offer other services that can be bundled together, such as a professional appraisal, photography services, or rental of a lockbox. The form will stipulate which services will be offered and for how long.
Discharge of Mortgage Form
In order to sell your home, you may need to discharge your mortgage, if you have one. (Assumable mortgages are rare, but if you do have one and you’re transferring it to the new owner of the property, this step does not need to be completed.) As explained at the personal finance website sapling.com:
A mortgage discharge is a legal document that releases a collateral hold — most often a loan — from a piece of real estate. In order to refinance, sell or buy a home, a property title must be clean. This means that all old liens and mortgages have to be discharged. Discharging a mortgage in Ontario, Canada, is a relatively simple process, and with the proper paperwork can be handled in under a week.
In order to discharge your mortgage:
- Find a discharge of mortgage form online, at your local Land Titles Registry Office, or from a real estate lawyer. But don’t fill it in – yet.
- Schedule a meeting with your mortgage lender and your real estate lawyer. The discharge of mortgage form needs to be filled out by your lender and
- witnessed by your lawyer, who will then emboss it with their notary seal.
- Pay the mortgage discharge fee.
- Take a copy of the notarized form to your local Land Titles Registry Office.
Forms Required by the Buyer’s Realtor
Sellers are usually responsible for paying the commission to the buyer’s realtor. However, when someone is selling their home privately, they haven’t signed forms with their own realtor to guarantee that payment.
In her Kiss and Sell blog, Peggy Blair explains that a buyer’s realtor will often require a private seller to sign two forms. Both Form 202, “Seller Commission Agreement with Co-operating Brokerage for a Listed Property” and Form 320, “Confirmation of Co-operation and Representation” ensure that the realtor is paid their commission if a sale goes through with their client.
Private sellers aren’t obligated to sign these forms. However, a realtor may refuse to assist their clients who are interested in a FSBO property if there is no guarantee that a commission will be paid. No one wants to work for free.
If you’re selling your home privately in Ontario, completing forms is part and parcel of the process. Fortunately, there aren’t many, and in most cases they are filled out by other parties and simply need to be reviewed and signed by you.