We're going to be new home buyers and we have some downpayment questions

November 25, 2015 12:15 PM

My wife and I are buying a house and our possession date is on December 4. My brother is my lawyer who will close the deal on the house. We're driving up from Regina to Saskatoon this weekend. This is our first house. He sometimes thinks he's given clear instructions when he hasn't and he'll end up blaming us for not reading his mind. My brother said I need to bring my cheque book, but he wasn't willing to answer why he needs the cheques. My wife and I are assuming that they're for both processing fees and for the down payment. If they are for a down payment too, should my wife and I move our money from our non-chequing accounts to our chequing accounts? Or will my brother only need void cheques, so that he can then obtain from funds directly from all my accounts at a later date (my tax free savings account and my chequing account, my wife's separate accounts)? Will it also be fine to have two cheques for the down payment (one from my wife and one from I)?
posted by DetriusXii to Home & Garden (16 answers total)

Best answer: In my experience, you need a certified cheque for this sort of thing, not just a personal cheque. I had to move all the money into one account, obtain a certified cheque and then deliver that to the lawyer (this is Ontario). I can't imagine buying with a personal cheque...?
posted by Mrs. Rattery at 12:50 PM on November 25, 2015 [3 favorites]

IANAL - at the closing, there is typically just one check that pays all expenses from the party who is coming out of pocket (usually the buyer); the attorney handling the closing normally handles the disbursements to various parties to the closing. That's one of the reasons for having an attorney do it - a trusted mediator/escrow between all these parties before the property is exchanged.

And yes, it might need to be certified.

Is your brother experienced with doing real estate closings? It's rather a specialty.
posted by randomkeystrike at 1:00 PM on November 25, 2015

In every closing there are several things that need to be paid. The two largest items will be the down payment (certified indeed) and the bank loan, which of course will come from someone else. Then there is a flurry of checks from the closing agency to the various people who need them - property tax payments, title insurance, drafting lawyer. But there are always one or two smaller things that have to be accounted for. One common example: the sellers have half a tank of propane left behind and you need to pay an additional $300 for that. For items like those, often a personal check is sufficient.
posted by yclipse at 1:01 PM on November 25, 2015

Response by poster: @randomkeystrike: My brother's main area is corporate and commercial law. So I don't know how much experience he has in real estate closings. He's started his law career in 2011. My wife's bank and my bank will be open on Saturday and we don't need to book an appointment for writing any certified cheques if we need them on the spot.
posted by DetriusXii at 1:24 PM on November 25, 2015

Get a lawyer who is not a relative, stat.
posted by arnicae at 1:29 PM on November 25, 2015 [17 favorites]

My brother said I need to bring my cheque book, but he wasn't willing to answer why he needs the cheques

You need a lawyer who will bother to answer your questions.
posted by charmedimsure at 1:39 PM on November 25, 2015 [15 favorites]

This is a situation where using a family member is so not worth the hassle. You get what you pay for and if you aren't paying a family member they don't treat you as they would a client.

My solicitor was happy to answer my questions and explained exactly what cheques I needed, what amounts and that they needed to be bank cheques. Between my good solicitor and good mortgage broker buying a house was entirely stress free. I feel stressed just thinking about your situation.
posted by kitten magic at 3:01 PM on November 25, 2015 [1 favorite]

The chequebook may be for things like pre-authorized payments for your mortgage or common expense fees in the event there is a condominium element to your house. In Ontario your closing funds would be from a bank draft/certified cheque but things may be different in Saskatchewan. There shouldn't be an issue with separate down payment cheques. It may be worth emailing your brother (or one of his clerks) to ask about the downpayment process.

If you have the money in a TFSA or RRSP then you should make sure you know the processing times involved to transfer it to your chequing accounts.

If your closing isn't until next Friday then it is entirely possible that he hasn't received the seller's statement of adjustments yet or your own mortgage instructions and so he wouldn't be able to give you any final figures yet.
posted by any portmanteau in a storm at 3:18 PM on November 25, 2015

That's true about the final figures portmanteau raises. But he should answer your questions about the type of cheques and why etc.
posted by kitten magic at 3:42 PM on November 25, 2015

Sorry to say, but if he weren't your brother and he provided this minimal amount of communication/attitude, you'd fire him for providing an inadequate service. I'd suggest letting him know that he seems overly busy and you've realized these things take a lot of time, so you'll be working with another lawyer and he is off the hook for running your errands.
posted by samthemander at 5:02 PM on November 25, 2015 [3 favorites]

I am a real estate agent (not in Canada) but I know enough to tell you that you need a lawyer who does real estate. Would you let your dermatologist do your heart surgery? Nuff said.
posted by St. Alia of the Bunnies at 9:44 PM on November 25, 2015 [1 favorite]

I used a bank draft for the down payment and my lawyer took care of all the bits and pieces, then I used another bank draft for closing costs (in Canada). I'd definitely recommend using a good real estate lawyer- mine was able to catch some things that to my uninformed eye seemed like they would be easy to miss.
posted by bighappyhairydog at 10:27 PM on November 25, 2015

When we bought our house in Ottawa a couple of years ago, we had a certified check from the bank for the down payment and also a check for something like $5000 for the lawyer that paid his fees, taxes, etc. It was either $500 or $1000 for the lawyers fees but certainly worth it for the assurance that everything was being done correctly.

Please get a real estate lawyer!
posted by betsybetsy at 6:07 AM on November 26, 2015

All money (lawyers fees, downpayment, any fees or taxes, etc) go in a certified cheque to the lawyer who puts it in a trust/holding account. Once the purchaser has signed off, the lawyer releases the funds to the mortgage company and keeps his fees, and sends you a bill for anything that wasn't covered.

At some point the mortgage company needs a void cheque to use for future mortgage payment withdrawls.

I'm not a lawyer or mortgage broker, but I am a Canadian homeowner, and that's how it worked for us. You don't "have to" know everything the lawyer does, but they do "have to" be clear about what they need from you and why.
posted by blue_beetle at 10:29 AM on November 26, 2015

Response by poster: How much time would a lawyer on short notice be able to complete the deal? The mortgage broker had recommended that we sign all documents 5 days beforehand. We've provided the deposit cheque to the realtor and the void cheque to the mortgage broker for weekly deposits. (We love our mortgage broker as he's very helpful). My wife just wants us to push through the deal with my brother, but what are the repercussions if the legal documents are delayed by having to switch lawyers? We already have the mortgage approved and the down payment ready.

I wouldn't pick my brother again, because I am getting the customer service I was paying for from him. He blew up at me last night as I was "pestering" him, when I asked for some details. He then proceeded to answer my text messages about the bank drafts after he had a chance to read them. He seems to be directing his relationship anger over towards me. I didn't twist his arm and I didn't ask for free service.
posted by DetriusXii at 12:14 PM on November 26, 2015

Yeah, this sounds like it was kind of crappy for both parties, even though you went in with the best of intentions. Hopefully by now it is water under the bridge.
posted by samthemander at 10:46 PM on December 1, 2015