Do you know what a purchase CEMA is? A purchase CEMA is basically a fancy legal speak for not having to pay mortgage tax.

So as a buyer, if I'm going to be taking a mortgage out for, say a million dollars, how much mortgage tax am I actually going to be paying? Well, it depends if the seller also has a mortgage on that existing property for a million dollars, you're gonna pay no mortgage tax at all. Because through the purchase CEMA transaction, you're gonna assume that mortgage and not have to repay the mortgage tax; which is a great saving! A huge amount of money because it's the biggest closing cost!

So, what's the advantage for the seller of doing a purchase CEMA? So, the seller also saves. They save on their transfer taxes by doing it. It's a much smaller amount, but it also gives them a lot of negotiating power when they're negotiating with the seller because they're giving them this huge gift, or they can split it with them. They can cut it a bunch of different ways!

Where in the process does the CEMA negotiation? Usually, I connect with a broker at the beginning of the negotiation process so I can provide them with a sheet that tells them based on the seller's mortgage, how much the buyer is gonna save, how much the seller is gonna save, how much it's gonna cost to do the CEMA process. That information happens during the negotiation process. As soon as the loan gets started with an executed contract, that's when the CEMA starts.