Private Real Estate Transactions

If you are buying or selling real estate privately without the assistance of a real estate agent, you are probably uncertain about the process and what exactly is expected of you. I hope this article will help you with some of those questions. As you will see, it involves quite a bit of time and work on your part.

Remember - You are Your Own Realtor

Since there is no realtor, you will need to personally take on the work that a real estate agent would normally do for you. The following is a list that may help you understand some of the tasks you will need to take on:

Advertising, Preparing & Signing the Offer

  • The seller will advertise the property for sale by website, newspaper, lawn signs and by whatever other media they feel suits the situation. If there is no realtor involved, the seller will show the property to prospective buyers and receive and negotiate offers from potential buyers.

  • The buyer is responsible to prepare and present the Offer to Purchase document. The seller needs to review it carefully to ensure that it is acceptable. If any of the terms are not acceptable to the seller, such as the price or a condition, then the seller can either decline to accept the offer or the seller may prepare and present a written counter-offer.

  • If you do not understand the offer documents, you need to ask your lawyer for help. Some lawyers will have an additional charge for this since it takes time but remember that you would not want to regret a mistake afterwards.

  • If you want to change the price, possession date or something else in the offer, get it in writing and signed. You will find forms on my website ( to get you started or you may have a form from elsewhere. If you are not certain of what to do, ask your lawyer. Again, you do not want to make a mistake so ask questions if you are not certain. No matter what, get it in writing. When you write, do so in plain english. Flowery language is "old school" and difficult to understand. Read it through afterwards and ask yourself if someone unfamiliar with the transaction would understand what it means. If not, write it more clearly. Ask yourself if someone could read it with different meanings. If so, write it more clearly to avoid potential disputes later on.

    Monitor & Remove Conditions in Writing

  • Once there is an accepted offer, the buyer must act promptly and reasonably to meet all of their conditions in the offer. That means immediately providing a copy of the accepted offer to their banker or mortgage broker, arranging for home inspections if applicable, etc. The buyer needs to personally keep on top of everything to ensure their conditions are met by the deadline dates in the offer. The buyer needs to confirm with the seller as the conditions are being met. The proper practise is to use a notice to remove conditions form as the conditions are met and give the signed form to the seller before the deadlines expire. If a condition was met by the deadline but notice is given to the seller after the deadline expires, some sellers may take the position that the sale is void. This may not necessarily be legally correct but for that reason the notices should be exchanged before the deadline expires. If an extension of time is required to meet a condition, the buyer and seller must agree. It is best that they both sign a short agreement extending the deadlines.

  • If you are the seller, you will need to follow up diligently with the buyer to ensure they are meeting their conditions by their deadlines. If you plan to buy a new home, your bank probably will not approve the mortgage for your new home until all the conditions on your sale are removed. Therefore it is very important for you to monitor the buyer's progress on your sale. If a letter from the buyer's bank says that they have mortgage approval subject to them selling their existing home, it means they do not have approval yet. Don't accept an offer from a buyer if you seriously doubt their ability to meet their conditions in the time you need to get your own purchase finalized. If a buyer wants too long a period to meet their conditions, it is a sign they may not be able to do so. This may prevent you from getting mortgage approval to buy your own new home in the meantime.

  • All of the above are all responsibilities of the buyer and seller since there is no realtor. It is not the responsibility of the lawyers for the buyer and seller unless the lawyers have clearly undertaken to do that work for them. If there was a realtor, the realtor would be doing this for the parties. For that reason, the lawyer may charge additional legal fees if they are asked to do it. Many people are prepared to do these tasks for themselves but if you do not feel you have the time or ability, you should consider asking your lawyer for help. Also remember that your lawyer is handling many transactions and is not allowed to speak directly with a party represented by another lawyer. You can probably follow up more efficiently.

    Instructing Your Lawyer

  • At some point, the buyer and seller should give a copy of the offer to their lawyer. You can wait until the conditions are met but you probably will want to do it earlier. I prefer to have a copy of the offer early as sometimes you may want to ask me a question and it is easier to answer it if I have the offer. If something falls through but you will still be using me on the next transaction, I typically don't charge much or anything for the sale that fell through except for the out of pocket costs unless I had done a lot of work for you.

  • When applying for mortgage approval, the buyers should give their lawyer's name and contact information to their banker or mortgage broker. This is so the mortgage instructions may be sent to the lawyer without delay.

  • Each lawyer will search the title and taxes for the property being sold/purchased. The lawyer for the seller takes care of preparing and getting the transfer documents signed, obtaining mortgage payout statements and paying off the seller's mortgage with the sale proceeds. The buyer's lawyer prepares all of the mortgage documents, collects the down payment from the buyers, registers the transfer and mortgage at land titles and advances the mortgage money.

    Insurance, Taxes & Utilities

  • The buyer must arrange their own fire insurance before the possession date. To be safest, the seller should not cancel their existing insurance coverage until the sale proceeds are released to them. If you are buying or selling a condominium, the condominium corporation usually insures the building. However, you may need insurance for your contents and any upgrades beyond the basic unit that is covered by the association. For example, if a unit basement was developed after construction or the kitchen was upgraded, that may not be covered by the condominium corporation's insurance. Ask your insurance agent for advice.

  • If the seller is on TIPPS (monthly tax instalments to a city) they must notify the city in writing themselves to cancel those payments. If they are unsure which payment should be their last, they should verify the correct date with their lawyer. If the seller forgets to notify the city to cancel payments, the city will keep taking payments.

  • If the buyer wants to enroll on TIPPS for monthly tax payments (assuming the municipality offers the option) they should do so before closing. See the TIPPS link to the left hand side for more information.

  • The buyer and seller should each contact the various utility companies to ensure the smooth transfer of accounts from the buyer to the seller on the possession date. This includes SaskTel, SaskPower, SaskEnergy and the water/sewer connection with your municipality.

    Releasing Keys

  • If there is no realtor, the keys are typically handed over on the possession date directly from the seller to the buyer. If the seller will be out of town, they may ask a family member to do this for them or they may leave the keys with their lawyer in that case. The seller should check with their lawyer before releasing keys to ensure that everything is in order. You don't want to prematurely let someone in your property if they haven't done what they are to do as buyers, such as signing their mortgage, obtaining insurance and paying their downpayment (the part of the purchase price not coming by way of mortgage).

    Interim Financing

  • If you are buying and selling near the same time, don't forget to read my article about interim financing. Also remember that your bank may not approve your interim financing or the mortgage on your purchase until all the conditions on your sale are completely removed ... unless they feel you have the financial ability to carry two mortgages, two sets of property taxes, utilities, etc until it sells.

    Of course there are likely other matters that you will need to take care of that are not mentioned on this list. However, I hope it will help you keep on track so that you can work towards an organized closing of your sale or purchase.

    Private Mortgage Loans

    Sometimes a borrower is not able to get approval for a mortgage loan through a bank, credit union, finance or other regular lender. When these conventional options are not available, some will resort to private lenders.

    I Regularly Act for Private Lenders

    If you are a private lender, remember that many lawyers will not know the regulatory requirements that apply to private lenders or have court experience dealing with defaults. I can provide my private lender clients information about regulatory requirements and help if there is a default.

    If you are making an RRSP loan secured by mortgage through various trust companies such as Olympia Trust Company or Canadian Western Trust Company, I am familiar with them and can help you.

    Loan Documents & Renewals of Private Mortgage Loans

    I can help a private lender with all of the required loan documents and registrations. I highly recommend that the borrower be required to see their own lawyer or notary to get their documents signed. It can be a conflict of interest to act for both in certain cases, but more importantly, if I have acted for both on the lending side, I cannot choose sides if the loan is later in default. I normally can't act for either against the other.

    I often see private mortgage loans where the renewals have not been documented properly. I can help my private lender clients with renewals.

    Foreclosures on Behalf of Private Lenders

    Private loans carry a higher rate of return but also a higher risk of default. They can often result in a loss. If you need to enforce your mortgage, I can help you with that process. I have about 35 years of experience doing this. I regularly conduct mortgage foreclosure or judicial sale actions on private mortgages. My approach is to give practical advice on how to handle the problem and personalize the information given to the court in the various stages of the action rather than using generic boiler plate documents. Your chances of moving the action along in court can often be better when the judge understands your situation better.

    Contested Private Mortgage Loan Actions

    Sometimes a borrower will contest your court action enforcing your mortgage. They may feel they have a real defence, but often they are simply wanting to stretch the action out as long as possible when they are not able to pay. I have a great deal of experience in dealing with contested actions.

    Clients Borrowing or Facing Foreclosure

    Just as I act for private lenders, I act for borrowers getting private mortgage loans or facing problems with private mortgage loans. I can represent you through the process and help you make the best of your situation rather than have you spend large amounts for legal fees on arguments bound to fail that will often only lead to frustration and disappointment.

    If a Mortgage is Already in Default

    If you are a private lender and the borrower is already in default on your loan, remember that the court process is quite lengthy in Saskatchewan. The procedure is quite different from many provinces such as Ontario. Give reasonable time for the borrower to bring payments current, but be realistic and proactive when your instincts tell you they probably will not be paying you. Inaction can increase losses. Remember that if loan payments are in arrears, the borrower is often not paying property taxes and they will have priority over the mortgage. This can also be the case if there is a first mortgage on title ahead of you. Real estate values, especially in smaller towns, may not be as good as you thought when the loan was made. The property fire insurance policy may have lapsed, exposing you to the potential of serious loss if it suffers damage. If the borrowers have moved out, they may have stopped paying utilities. An unheated house or other building can easily freeze in the winter, resulting in great loss that regular insurance policies, even if in place, probably will not cover. Check with your borrower to ensure that the property is occupied and utilities are all connected. Get a copy of the insurance renewal to ensure that coverage is still in place.


    The public often assumes that every lawyer is well versed in all areas of the law. Of course that is not possible. I don't practice criminal law, family law, personal injury law or many other areas or the law because it is not possible to be highly competent at everything. However, I do regularly deal with private mortgage loans and mortgage foreclosure issues. I can help if you have a problem in that area.

    Notice:The information on this website is general in nature only. It relates to Saskatchewan, Canada and may not be applicable in your jurisdiction. It does not constitute legal advice to you and no solicitor client relationship will be established. A conflict check would also be required before our firm can act for someone. You should seek specific legal advice regarding your circumstances from a lawyer entitled to practise law in your jurisdiction.
    * Richard Carlson Legal Prof. Corp. | Friday, Jul 19 2024 05:11 am UTC1 (-6 hrs for Sask)