Real estate sales professionals are obliged to conduct due diligence, especially when taking on a new listing. This due diligence includes evaluating both the client and the property.
On a new listing, you not only want to look at the physical property to ensure that you have disclosed all physical attributes accurately, you should also consider looking at a part of a property title search that is called the Parcel Register.
The Parcel Register essentially provides the history of the property’s title, including ownership, transfers and encumbrances. The Parcel Register is an excellent device that can be leveraged to exercise due diligence when taking on a new client.
o First of all, the Parcel Register will enable you to quickly identify all legal owners of the property so that you can ensure that all of the right parties are present when you sign off on your contract with them.
o The Parcel Register will also provide information that should give you an idea of whether or not your client has sufficient equity to pay your fees. You will be able to see when the property was transferred to your client, in what amount, any mortgages registered against the property, when they were registered and the amount that they were registered for. For example, what would you do if you engaged a new client who wanted to sell their home for $350,000 but then upon reviewing their Parcel Register you saw that they purchased the home 10 months ago for $300,000 and have a mortgage tha t was registered only 10 months ago for $290,000? In this scenario, this client may not have the equity they think they do or the ability to pay your fees.
o The Parcel Register also helps you avoid issues from arising upon closing. The Parcel Register will reveal any liens which could include condo fee arrears, property tax arrears, and construction liens just to name a few. It will also reveal un-discharged mortgages and other items that could cause delays.
Most people don’t intentionally miscommunicate or omit information but if this happens
, it results in an incredible waste of
time for all those involved. It causes a complete chain reaction; not only does
your time get wasted but so too does the time of the prospective buyer, the
buyer’s agent, mortgage broker, lender, real estate lawyer, etc…
Exercising your due diligence at the beginning of a transaction can save you, your client and other parties significant time and expense as problem deals can be quickly identified. There are many issues that come up at the last minute on real estate closings that could be identified much earlier through a Parcel Register. Many of these issues can be overcome through providing the real estate lawyer with documentation as they request it, but knowing and addressing these issues earlier in the process makes closings go much more smoothly.
For more information about how you can obtain a Parcel Register through GeoWarehouse please visit www.geowarehouse.ca or call 1-866-237-5937.