Top Things to do before your home closing date?

So you put down an offer on your new home and it was accepted, Congratulations!! You are on your way to home ownership, now what? What do you do need to do by your home closing and when do you need to do it by? When buying a new home, many people are only focused on trying to win the bid and are unprepared for what's next and items they need to do before the transactions is complete on your home closing date. Besides confirming the signing / counter-signing the offer where the home becomes sold conditionally, to ensure the offer becomes firm, there are a number of items and task that will / might need to take place.

Contract Conditions

Typically apart of every purchase and sale agreement there are clauses called conditions that must be fulfilled by the home closing date in order to complete the transaction. These conditions are part of the home closing process and it is very important that these conditions are completed within the time frame stated or the deal / offer can fall through and you might /will lose the house. Conditional items that must be fulfilled are found in the "Schedules" attached to the Agreement of Purchase and Sale and consist of the following:

  1. Provide the Deposit / Down Payment:
    • The Deposit amount agreed to (usually 5% of the total down payment) on the offer must be provided to Seller's Agent / Brokerage within 24 hours after the offer has been signed and accepted. The due date and amount for the remaining down payment is usually a condition on the offer and is must be provided to the Seller's Agent or Brokerage by the date/time frame agreed upon in the condition. If you have funds within high interest savings accounts, mutual funds or other locked in funds, ensure that you have enough time to move your funds so that they are readily available to attain a certified cheque or draft by the date required and especially before the home closing date.
  2. Arrange Your Mortgage Financing:
    • It would be nice if all we had to do is write a cheque and pay off the remaining amount owing on the house, but for most people you will need to arrange a mortgage. The mortgage amount will be the difference between the purchase price and the deposit / down payment amount and will be required by your on the day of closing to close the transaction. The traditional way to arrange a mortgage is to contact your preferred bank and ask them to transfer your existing mortgage or arrange a new mortgage by filling out forms which will include your occupation, income and debts. The use of mortgage brokers and online mortgage websites like that search for the best mortgage rate for you is currently on the rise (example: www.ratehub.ca), and securing a mortgage with a lender that is different from your every day banking is common place today. Some advantages of using a mortgage broker is that they will hunt for the best rate available on the market for you and their services are usually free of charge to you.
  3. Home Inspection:
    • If a home inspection (which I highly recommend) is a condition of the purchase and sale agreement, arrange to have a home inspection conducted by a reputable company, which will give you a unbiased overview of the condition of the home, the positive and negative technical aspects and can help reduce the risks of unforeseen repairs and costs in the future. A home inspector can identify unforeseen items and problems with the property which might make you reconsider purchasing the property or renegotiating aspects of the contract.
  4. Obtain Status Certificate from Seller (Condominium's only):
    • If you have agreed to purchase a condominium or co-op, obtain the status certificate for that building to ensure that the building's finances are in good shape and that there are no liens, large or special adjustments on the property that would material in the decision transaction. This should be a mandatory condition placed in the agreement if you are buying a Condominium.
  5. Other Conditions:
    • There might be other less common conditions that are placed on the agreement that must be fulfilled before the transaction can close. These conditions can range from arranging / modifying monetary cost /financing, verifying easements or building permits, including or excluding chattels or equipment or dealing with environmental issues. If one of these conditions are included in the purchase and sale agreement, then they must be fulfilled by the buyer or seller.

Any conditions that are included and agreed upon on the purchase of sale agreement, then the buyer and seller either must fulfill or waive the condition by the time frame stated. If the condition is is not fulfilled or waived, then the buyer or seller is able to void the purchase and sale agreement and the sale of the home will fall through.

Other Tasks and Items

Other tasks that you should prepare for during the closing period are:

  1. Find/Hire a Real Estate Lawyer:
    • Choose a reputable lawyer that specializes in real estate that can help you through and explain these important items. A real estate lawyer will act as an agent for you through the closing process right up to the day of your home closing by:
      1. The real estate lawyer will help you prepare and register the property.
      2. check that there are no covenants, easements, liens, and scrutinize the adjustments on prepaid utilities and property taxes.
      3. The real estate lawyer will also help you understand the purchase contract, including how you will take title on the property and clarify the terms of the mortgage and work with your bank, if necessary, to modify them.
  2. Prepare your Utilities:
    • Call any utility provider whether it be for Cable, Telephone, Internet and / or Security service companies, one to two weeks before closing to have a technician onsite the day after closing. I do not usually recommend to have technicians or moving companies come the day of closing as it does take time to close the deal on the house with the Lawyer.
  3. Save Money for Closing Day, "Closing Cost":
    • The deposit, down payment and mortgage are the most important financial arrangements that require to be made, however do not over look the amount of funds that are required at closing that are considered "closing cost". Your real estate lawyer should be able to provide you with a list of majority of the closing cost that is due on the day of closing, which would include, Land Transfer Taxes (Provincial and Municipal), Legal Fees and Disbursements, Title Insurance and/or Mortgage Insurance cost (if applicable) and adjustments for property tax and prepaid utilities. Other cost that you will need to consider are, moving cost, painting, renovations, mail redirection and cancellation or setup cost of any existing / new utilities or rentals. The typical home closing cost usually adds up to about 2-4% of the purchase price of the home depending on where you live in Ontario. Toronto has an additional Land Transfer Tax which you will require to pay, increasing your total closing cost. (Click to find out all about the Provincial and Municipal Toronto Land Transfer Tax)
  4. Prepare to Move:
    • If you are hiring movers, call them a couple weeks in advance to book your time. If you are moving yourself, call the truck rental place (and your strong buddies) at least a week in advance. If you purchased new appliances/furniture arrange for the store to deliver the packages on (or just after) closing day.

Contact Nicholas Chan  or vist www.NicholasChan.ca for more information and tips about real estate and to know the current value of the property you have or are interested in. For an initial consultation, questions or to chat over coffee, please call me at (416) 889-6906 or by email at Nicholas.Chan@century21.ca or clicking here.  

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