Congratulations on the purchase of your new home!
We have prepared the information below to assist you through the closing process and eliminate some of the stresses involved. We have prepared a checklist to outline the steps you can take to help ensure your purchase goes smoothly.
We have also provided you with a budgeting worksheet (to be completed with the assistance of your lawyer and your mortgage representative) to help avoid any financial surprises on closing.
We hope the information below will answer some of your questions. If you have any other questions, please do not hesitate to contact us!
MY OFFER WAS ACCEPTED…NOW WHAT?
1. FIND A LOCAL REAL ESTATE LAWYER
Once the Agreement of Purchase and Sale has been signed, you should bring it to your lawyer as soon as possible. Your lawyer can explain to you your obligations under the Agreement. Your lawyer should also tell you what expenses you are likely to incur with respect to the closing, including legal fees, disbursements and Land Transfer Tax.
Your real estate agent can give you the names of a few lawyers in your area. Call them to find one that you are comfortable with. It pays to shop locally for a real estate lawyer, particularly in Halton region, where the registration system is entirely electronic.
Advantages to using a local lawyer include:
- He/she should be experienced with properties in the area;
- Reduced courier charges/long distance;
- You can make local connection for wills and simpler matters;
- He/she will be experienced with new Electronic Registration system;
- Reduced costs due to the use of time & cost saving technologies; and
- He/she will have built good relationships with local officials and other local lawyers
Make sure that the lawyer you choose practises mostly Real Estate is an unanticipated problem that arises on your closing date, your lawyer can’t help if he or she is in court until late in the afternoon.
Many lawyers will practise primarily in other areas of the law and still offer real estate services. Real estate is a complex area of the law, where keeping up to date with changes in the law and technology is essential.
There are over 200 steps in a residential purchase transaction if your lawyer is paying attention to the details.
ADVISE YOUR AGENT PROMPTLY WHO YOU HAVE CHOSEN
2. ARRANGE MORTGAGE
It is your responsibility to make the necessary arrangements for financing. You should have decided prior to signing the Agreement of Purchase and Sale, the amount of financing you will qualify for and the amount of funds you will need to complete the transaction. There are a number of expenses you may not expect on the day of closing that relate to mortgage financing. Confirm any additional charges with your bank or mortgage broker in connection with the mortgage including interest adjustments, application fees, CMHC/GE Capital insurance fees, PST on CMHC/GE Capital insurance fees, appraisal fees and realty tax holdbacks.
|20% down||1.00% of the mortgage amount|
|15%||1.75% of the mortgage amount|
|10% down||2.00% of the mortgage amount|
|5% down||2.75% of the mortgage amount|
3. ARRANGE FIRE INSURANCE
You will have to arrange for fire insurance to cover the property from the day of closing. Have your insurance agent contact your lawyer to confirm coverage. Your mortgage company requires evidence of the insurance before funds can be released to your lawyer for closing. The confirmation is called an insurance “binder”.
4. CALL UTILITIES
You should contact the utility departments directly to provide them with some of the personal information they need in order to set up your accounts.
|Oakville Hydro / Water||(905) 825 9400|
|Union Energy||1 (888) 718 6466|
|Union Gas||1 (888) 774 3111|
5. ARRANGE MOVERS
Count on receiving your keys by 5:00 p.m. If you are using professional movers, this will avoid having them waiting for keys while you are paying them.
6. FOLLOW-UP WITH BANK/ MORTGAGE BROKER
Two weeks before your closing you should call your bank or mortgage broker to ensure you have signed all paper work that they need you to.
7. CALL YOUR LAWYER TO MAKE APPOINTMENT
Your lawyer will typically require you to come to his/her office to sign all of the final documents during the last week prior to closing, sometimes even the day before closing. That is why it is important for you and anyone else going on title or guarantor of the mortgage to stay in town during this crucial time. Purchasers often wonder why the signing of the documents is done seemingly at the last minute. One of the reasons is that some of the documents are prepared by the vendor’s lawyer and the bank. This can hold things up for the purchaser’s lawyer.
8. BRING CERTIFIED FUNDS AND PHOTO IDENTIFICATION TO YOUR LAWYER
Your lawyer will tell you how much money you will have to bring by way of a certified cheque, bank draft or money order, since all funds are coordinated through your lawyer. Bring a certified cheque for the balance of the down payment, legal fees and Land Transfer Tax to your lawyer’s office, payable to your lawyer “In Trust” by 5:00 p.m. the day before closing. Due to the growing awareness of real estate fraud, lawyers are now required to take two (2) pieces of identification from all clients.
9. AFTER CLOSING
When you move into the new home, check to see that all items noted in the Agreement of Purchase and Sale and indicated as included in the purchase price are left on the property by the vendor. If you believe something is missing, contact your lawyer immediately.
After closing your lawyer will prepare a reporting letter to you and provide copies of all necessary documentation. You should keep this letter and these documents in a safe place for future reference when refinancing or selling the property.