In Ontario, it is entirely legal to buy or sell real estate without using a realtor. These are known as private real estate transactions. While this route may seem appealing due to potential savings on commission fees, it’s not as straightforward as it might seem. Whether you’re purchasing a home from a family member, selling a cottage to a friend, or simply trying to save on agent fees, it’s critical to understand the responsibilities you’re taking on and the legal risks involved.
In this article, we’ll walk through the key aspects of completing a private real estate transaction in Ontario, highlight common pitfalls, and explain how a real estate lawyer can protect your interests.
Why Do People Choose to Skip Realtors?
Many Ontarians choose to go the private sale route for reasons such as:
- Saving on realtor commission – typically 4–5% of the sale price, split between buyer and seller agents.
- Selling to or buying from family/friends – where both parties already know each other.
- Using For Sale By Owner (FSBO) platforms – websites that allow property owners to market and sell their homes directly.
- Already knowing the buyer – such as a tenant purchasing from a landlord.
While these scenarios make it easier to bypass a realtor, they don’t eliminate the need for legal protection.
What Realtors Normally Handle (That You’ll Need to Manage Yourself)
If you choose not to hire a real estate agent, you’ll need to take on several responsibilities, including:
- Determining market value of the property
- Marketing and advertising the home effectively
- Coordinating viewings and open houses
- Negotiating the sale price and conditions
- Drafting or reviewing the Agreement of Purchase and Sale
- Managing key dates like deposit due date, financing condition deadline, and closing day
You may be able to handle some of these tasks yourself or with online tools. However, one thing you should never do without: a qualified real estate lawyer.
What a Real Estate Lawyer Does in a Private Sale
In the absence of a realtor, your lawyer becomes your most important professional partner in the transaction. Whether you’re the buyer or the seller, their role includes:
- Drafting or reviewing the Agreement of Purchase and Sale
- Inserting protective clauses related to conditions, timelines, and inspections
- Conducting a title search and identifying risks such as liens, easements, or zoning issues
- Coordinating closing tasks, including document registration and transfer of title
- Handling trust funds and deposit money safely
For sellers, your lawyer ensures your sale complies with disclosure laws. For buyers, they make sure you’re not stepping into legal or financial trouble.
Top Legal Risks in Private Real Estate Transactions
- Improper or incomplete contracts – Real estate agreements have specific legal requirements. Mistakes can lead to unenforceable deals or disputes.
- Market mispricing – Without guidance, sellers may underprice or overprice their home, leading to poor outcomes.
- Deposit mishandling – If not held in trust by a lawyer, deposits can be misused or disputed.
- Unclear disclosure obligations – Sellers must legally disclose defects. Failure to do so can lead to lawsuits.
- Missed deadlines – Timing is everything in real estate. Errors here could cancel your deal or trigger penalties.
Can a Lawyer Help You Negotiate?
While lawyers are not licensed to act as agents or brokers, they can help with:
- Advising on fair market terms
- Reviewing the offer or counteroffer language
- Recommending amendments or protections
- Flagging red flags in the deal structure
They help ensure that what you agree to is in your best interest—and legally enforceable.
Frequently Asked Questions (FAQs)
Q: Is it okay to use a standard template for the Agreement of Purchase and Sale?
A: It’s not recommended. Templates often miss critical protections. Every deal is unique, and your lawyer should review or draft the agreement to suit your situation.
Q: Who holds the deposit in a private sale?
A: Your lawyer can hold it in a trust account, just like a brokerage would.
Q: Does skipping the realtor affect land transfer tax?
A: No. The buyer is still responsible for paying Ontario Land Transfer Tax.
Final Thoughts
Private real estate deals in Ontario are completely legal—but also legally complex. While you may save thousands by not hiring a real estate agent, skipping a lawyer is a mistake that could cost far more.
A real estate lawyer ensures your rights are protected, your paperwork is correct, and your deal closes smoothly.
Need help with a private real estate purchase or sale? Send your Agreement of Purchase and Sale or legal questions to legal@philer.ai, and let our legal team at Philer handle the rest with clarity and confidence.
