Buying a Home in Ontario: Legal Steps, Costs & Common Pitfalls

The Agreement of Purchase and Sale (APS)

The APS is a legally binding contract once accepted. Key elements:

• Deposit: Typically 5% of the purchase price, paid within 24 hours of acceptance and held in trust by the listing brokerage. The deposit is at risk if you fail to close without a valid reason.
• Conditions: Common conditions include financing (typically 5 business days) and home inspection (3–5 business days). If a condition is not satisfied, you can walk away and get your deposit back.
• Chattels and fixtures: The APS should specify exactly what is included (appliances, light fixtures, window coverings, etc.).
• Closing date: The date title transfers and the balance is paid.

What a Real Estate Lawyer Does on Closing

1. Conducts a title search to confirm the seller actually owns the property and that there are no undisclosed liens, easements, or encumbrances.
2. Arranges title insurance to protect you against title defects, survey issues, and fraud.
3. Receives and reviews the mortgage instructions from your lender.
4. Calculates closing adjustments — prepaid property taxes, utility deposits, condo maintenance fees.
5. Registers the transfer of title and your mortgage at the Land Registry Office.
6. Delivers keys and closing documents.

Land Transfer Tax (LTT)

Ontario charges LTT on every property purchase. Toronto buyers pay an additional Municipal LTT:

First-time homebuyer rebate: First-time buyers may receive a rebate of up to $4,000 on Ontario LTT (and up to $4,475 on Toronto LTT if applicable) if they have never owned a home anywhere in the world.

Common Closing Cost Estimates

Title Insurance vs. Survey

A survey shows the physical boundaries of the property. Title insurance is not a replacement for a survey — it insures against financial losses arising from title defects. Most Ontario residential buyers purchase title insurance instead of a new survey (surveys can cost $1,500–$3,000). Title insurance is strongly recommended.

When a Deal Falls Apart

If you fail to close without satisfying or waiving your conditions:

• During a conditional period: you can walk away; deposit is returned.
• After waiving conditions: failure to close may forfeit your deposit and expose you to a lawsuit for damages (the difference between your contract price and what the seller ultimately gets on resale).

If the seller fails to close, you are entitled to return of your deposit plus damages. These disputes frequently end up in Small Claims Court or Superior Court.