Guide to Selling and Transferring Real Estate by Owner

Last updated February 20, 2024

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In the vast landscape of real estate transactions, empowerment is key—and that’s exactly what this guide aims to provide. 

Selling or transferring property requires thorough research, careful documentation, and a clear understanding of local real estate laws. 

These complexities can be overwhelming without the help of a lawyer or realtor, but it’s certainly feasible (and budget-friendly) to minimize their involvement by getting some things done yourself.

Whether you’re ready to part ways with a cherished home or navigate the intricacies of a property title change, this guide is your roadmap to success. Read on to discover the strategic insights, legal processes, and critical documents you’ll need to open the door to your next chapter in Canadian real estate.

Let’s begin by explaining the distinction between these two types of property transactions.

Selling real estate involves disposing of a property in exchange for money. Usually, a realtor or the property owner facilitates the selling process—which typically involves finding a buyer, negotiating a sale price, and completing a transaction.

Once a sale goes through, the next step is to transfer legal ownership of the property.

Transferring real estate doesn’t always include a monetary exchange; however, it does involve changing the ownership of a property from one party to another.

A transfer can occur for various reasons unrelated to sales, such as for gifts, inheritances, and divorce settlements. 

In the legal context, a property transfer is commonly called a conveyance. Usually, lawyers handle the legal procedures and paperwork that go along with transferring real estate. 

If you find yourself in a challenging scenario, the expertise of a professional might be just what you need. But, if that’s not the case, here’s a simple guide for selling and transferring real estate in Canada.

To ensure a private sale goes smoothly, it’s essential to understand these key steps, tools, and tips. 

Organize your paperwork

First, it’s crucial to familiarize yourself with the forms needed for a legal and transparent transaction:

1. Offer to Purchase Real Estate: Use this document to promote transparency and a clear understanding between the buyer and seller. An Offer to Purchase begins the negotiation process and finalization of the sale. Once signed, the document becomes binding on both parties.
2. Real Estate Purchase Agreement: This contract outlines the terms and conditions of the sale, protecting both parties and providing a solid foundation for a successful transaction.
3. Property disclosure forms: The property owner must disclose any known defects or issues with the property to potential buyers. This is a legal requirement in many jurisdictions, so gather any related documents to disclose the right details. (Note that LawDepot’s Real Estate Purchase Agreement template includes the option to list any material latent defects.)
4. Land title/ownership documents: The land title is a legal document that provides official information about the property and its ownership history. It's crucial to do a land title search to confirm the property is free from deficiencies or liens and may be lawfully sold. 

Open and close the deal

After assembling the proper documentation, it’s time to put on your realtor hat.

Here are five actionable steps you can take to sell your property independently.

1. Set an accurate price: Research comparable properties in your area to determine a competitive and realistic selling price. 
2. Prepare the property: Enhance your property’s appeal by decluttering, cleaning, and making any needed repairs. 
3. Market effectively: Craft a compelling listing by outlining key features and benefits of the property, describing the neighbourhood, and adding high-quality photos. Then, use both online platforms and traditional marketing methods to attract interest. 
4. Learn to negotiate: Be prepared for negotiations but remember to stand firm on your bottom line. You’ll need to establish a minimum acceptable offer and be clear on non-negotiable terms. Document all offers and counteroffers in writing to create a clear record.
5. Close the deal: Once you reach an agreement, you’ll need to finalize the paperwork, transfer ownership, and ensure a legally sound transaction.

A property title transfer is a complex legal process with paperwork that varies by province/territory.

If you’re considering making changes to the ownership of a property, such as adding or removing names on the title, it’s crucial to do your research to ensure the transfer is legal and protects your interests.

With an understanding of the law and processes in your province, you can transfer a property title with confidence. 

In the next few sections, we’ll discuss the nuances of title transfers and the steps it takes to conduct one.

Provincial and territorial processes

Property title transfers vary across Canada due to differences in systems, regulations, and laws. This can impact the specific legal forms needed, processes for performing title searches, types of registration systems, and more.

For more information on property and land title offices, you can check the official government websites of each province and territory.

In general, the process in each jurisdiction goes something like this:

1. Gather the necessary forms and documents: Go through your local land titles office to find forms for changing land title ownership. To complete these forms, you’ll need to gather information and documents related to the property. This can include the legal land description (or parcel/property ID number), ownership documents, property tax information, mortgage details (if applicable), and any other relevant papers.
2. Do a title search: The land titles office typically connects you to a registry service for conducting a title search. This ensures there are no outstanding liens, mortgages, or other encumbrances on the property that could complicate the transfer process.
3. Complete your paperwork: Fill out the title transfer form accurately and completely. Be sure to confirm which documents you’ll need in your jurisdiction and their signing requirements. For instance, if you’re married in Alberta, you may need certain spousal consent or dower affidavit forms. In some cases, both the seller (i.e., the transferor) and the buyer (i.e., the transferee) may need to sign the transfer form in the presence of a witness or a notary public.
4. Pay transfer taxes: In some provinces or territories, there may be land transfer taxes or fees applicable to property transfers. On top of that, there may be municipal fees or taxes as well. So be sure to pay any required taxes or fees as per local regulations.
5. Submit the paperwork: Submit the completed transfer forms along with any supporting documentation to the land titles or registry office in the jurisdiction where the property is located. This may include payment of registration fees.
6. Obtain acknowledgment: Once the transfer is registered, the land titles office will issue an acknowledgment of the transfer, confirming the change of ownership. In some cases, people may have to request confirmation of registration (e.g., as is the process in British Columbia).
7. Update records and finalize legalities: Notify relevant parties of the change in ownership, including the municipal property tax office, utility companies, and insurance providers. Then, finalize all legal and financial aspects of the transfer, such as registering a new mortgage if needed.

How much does it cost to transfer a property title?

The costs of a property title transfer can range from several hundred to several thousand dollars. The actual amount depends on a variety of factors (e.g., the property’s value, the complexity of the sale, insurance costs, location, etc.).

In general, you can expect to pay the following when transferring a property title:

• Recording fees
• Title search and title insurance
• Land transfer taxes or fees
• Notary fees
• Escrow fees

How long does it take to transfer ownership?

The entire process can take anywhere from a few weeks to several months, again, depending on how complicated the transaction is. For instance, there may be delays encountered during the document gathering or title search processes. That’s why it’s essential to follow up regularly to ensure a smooth and timely transfer process. 

Yes, the general process of transferring a title remains the same when doing so as a gift, but there are some key differences to keep in mind.

Most importantly, the relationship and intent of the transfer may make it subject to specific rules or exemptions. Of course, the details of these tax exemptions vary depending on the rules in your province or territory.

In British Columbia, for instance, you may be exempt from paying property transfer taxes when gifting a recreational home to your spouse, child, or grandchild. Other potential tax implications can include earning gift tax credits when donating to charity or paying capital gains taxes if the property value increases.

Although the basic steps of gathering, completing, and submitting forms for a property transfer will still apply, there may be extra steps or paperwork due to the nature of the property transfer. This can include proving a familial relationship or executing a gift deed or other similar transfer document.

While you may not be legally required to do a title search when gifting a house, it is beneficial. Ensuring a clear title protects against potential legal disputes or challenges to the transfer of ownership in the future. 

Title insurance can also provide peace of mind against unforeseen title defects or claims that may arise. Keep in mind that you typically need a title search to get approved for title insurance.

No, generally, mortgages aren’t transferable without the lender’s approval. 

In fact, some mortgages may contain a “due-on-sale” or “alienation” clause that gives the lender the right to demand full repayment if the property is sold or transferred to another party. As such, it’s essential to review the terms of your Mortgage Agreement and consult with your lender before attempting to transfer a mortgage to another person. 

In some cases, lenders may allow a mortgage transfer under certain conditions. This can include charging processing fees or re-financing the mortgage under a new name.

Related document: Lenders can use a Discharge of Mortgage to acknowledge a borrower’s full repayment.

As mentioned earlier, there are several avenues for governments to collect taxes on a property transfer. Your jurisdiction, the nature of the sale (e.g., gift or sale), and the value of the property are some of the factors that can impact your taxes.

In general, here are some of the tax consequences of transferring property in Canada:

• Local transfer taxes and fees: The exact fees that apply depend on the province and municipality that the property is in. Transfer costs are typically based on the property’s sale price or fair market value.

• Income taxes: If the transfer results in the forgiveness of debt or other financial benefits, any consideration may be subject to income tax for the recipient. If the property appreciates in value after its acquisition, and the transfer is structured as a sale, any gain realized on the sale may be subject to capital gains tax for the seller. 

• Gift tax: In some cases, a property may be transferred as a gift with retained interest. This means the donor keeps certain rights or interests in that property, despite gifting it to someone else. As such, there may be income tax implications for the donor or recipient, depending on the terms of the transfer and any applicable laws. Also, capital gains tax will still apply to many gifts (e.g., if the gift is not to a spouse or common-law partner).

Consult a professional accountant for a better understanding of how taxes apply to your unique situation.

All in all, we must emphasize the importance of thorough research and careful documentation when embarking on a real estate journey. 

Whether selling a property independently or transferring a property title, being well-informed about local real estate laws and regulations is essential to protect one’s interests and ensure a smooth transaction.

So, to sum up, here are this guide’s key takeaways:

1. There’s a difference between selling and transferring real estate. 
2. It’s essential to organize the right paperwork to ensure a legally sound transaction.
3. Refer to your local land titles office for insight into the regional nuances of property transactions.
4. Understanding the varying tax implications of property transactions is crucial for informed decision-making and financial management.
5. While it’s usually possible to navigate property transactions independently, always leverage professional expertise when needed. 

So there you have it! 

Once you grasp the legal steps, gather the right documents, and get help when necessary, you’ll be all set to tackle property transactions with confidence and reach your goals in the Canadian real estate market. 

Good luck!