Closing the deal
Closing the deal
Closing day or completion day is the point at which the ownership and usually possession of the property is transferred from the seller to you. It takes place after the parties involved agree that all legal and financial obligations have been met. Several people, including you, will have a role in events leading up to this process.
Here is a checklist of the major things to be done so you’ll know what to expect along the way:
- Make sure a copy of the signed purchase contract is sent to your lawyer right away. The Realtor will usually do this for you. Your lawyer needs to see any details that exist, and the date you and the seller have agreed to close. The lawyer will ask how you (and others involved in the purchase with you) want to be registered on the title to the property.
- Upon your direction, your lawyer will begin searching title to the property. This can be an involved and time-consuming process of going back through government records to be sure the seller has clear title and that it can be transferred to you without any problems.
- It’s a good idea to have an up-to-date real property report on the property. If one does not exist, arrange for one soon. Alternatively, you could explore the option of title insurance with your lawyer.
- Contact your lending institution and have them begin the process of finalizing your mortgage documents. Your lawyer will draw up the documents.
- Your lawyer will contact the seller’s lawyer with any questions or issues regarding title and costs that have to be resolved before closing can take place.
- Gas and utility companies serving the property should be contacted by your lawyer for final meter readings on the day of closing. Your lawyer will also make sure these utilities have no outstanding claims against the property for unpaid bills and will usually arrange for the utilities to be transferred to your name. You should contact the telephone and cable company to arrange for all services to be put in your name.
- If you currently rent, you’ll need to give notice to your landlord.
- Begin making arrangements to move your possessions from where you live now into your new home.
- Meanwhile, your lawyer will be busy gathering a number of different reports, certificates and clearances from various government offices. The lawyer will be making sure that property taxes on the house are up-to-date, local zoning and building restrictions have been met, and there aren’t any liens (outstanding obligations) on personal property, such as appliances, to be sold with the house. You want your lawyer to make sure that what you’ve agreed to buy is what you’ll get – nothing more and nothing less.
- If your lender is not going to draw up the mortgage papers, your lawyer will do this for you. When a vendor take-back mortgage is involved, your lawyer will create this document too. If you’re assuming an existing mortgage, make sure you’re qualified to assume by contacting the lending institution and have your lawyer review any documents you will be signing.
- Send out your change of address notices and fill out a card at the post office. Arrange to have your address changed on your driver’s licence, car registration, etc.
- Well before closing, contact your insurance broker to arrange homeowner’s insurance coverage effective on the date of closing. They may not issue you a policy before that date but your broker can give you a “binder”letter, certifying coverage is in place. You may need to produce this document before closing. If you’re moving from your current home to another, your broker will handle the homeowners’ insurance transfer for you. You may also want to ask about mortgage life insurance.
- Your lawyer will review and verify the draft title, statement of adjustments and other closing information provided by the seller’s lawyer and will deal with any problems as they arise.
- A day or two before closing, you’ll meet with your lawyer to go over and sign the closing documents. You’ll need to bring the certified cheque(s) to cover the costs involved to that meeting. Your lawyer will let you know the amounts before the meeting date.
The big day arrives
So much happens in such a short amount of time, it can all become quite a blur. If your lawyer arranged everything well, closing day can be almost anticlimactic. The lawyers for both parties exchange documents, release keys and cheques and then register the title and the mortgage. Soon thereafter, you’ll be given the keys to your new home. The contract states that possession will happen at noon on closing day. Sometimes delays can happen, so I always suggest you expect to hope for the keys this day. Either at noon, or shortly there after.
Moving day vs closing day
Although it may seem like the logical choice, moving day shouldn’t necessarily be closing day. The actual closing involves many different players, can take a long time, and doesn’t always go as planned. What if you’ve got movers sitting on your front porch at noon, clocking time on closing day with no key’s in sight? Glitches happen.
You’d be wise not to plan to have your closing day coincide with moving day, especially if it’s at the end of the week, or at the beginning or end of a month. Schedule your closing the day before your moving day to cause as little stress as possible.
When you have the keys in your hand, at the open door of your new home – now you can celebrate! The home is legally, officially, and absolutely yours, so do what you will!