Buyer’s Journey: Here’s What To Expect on Closing Day
Getting the keys to your new home – it's a moment many of us dream of. The day you can finally call that place your own, where memories will be made and walls will echo with laughter. But before you can unlock that front door and step into your new life, there's a crucial step you need to navigate: Closing Day. It's the day when all the pieces of the property puzzle come together, and you officially become a homeowner.
In this blog, we have mentioned the proper action to take on closing day so that things can align smoothly for your possession.
Here’s a brief on what you can expect on closing day so that you don’t miss out on anything :
Usually before the actual closing, you will go for a final walk-through of the property. This will be your last chance to ensure that the home is in the condition you agreed upon in the contract and that any requested repairs have been done thoroughly.
Following are the things you should look for during your final walkthrough:
Agreed-upon concerns are fixed (appliances, light fixtures etc.)
Ensure utilities are working and in proper order
Appliances are running properly
Heating and cooling systems work
Bring Required Documents
You’ll need to bring a few important papers to the closing, including your identification, proof of homeowner’s insurance, and a cashier’s check or wire transfer for the closing costs and any down payment. Your lender and real estate agent will assist you with exactly what you need.
During closing, you’ll be presented with a bunch of documents to sign. These will include the following:
Closing Disclosure: This document states the final terms of your loan, including interest rate, monthly payments, and closing costs.
Promissory Note: It is a legal document mentioning your promise to repay the loan, along with all the details of the loan duration.
Deed of Trust or Mortgage: This paper secures the loan with the property and gives the lender the right to foreclose if you fail to make payments.
Title Documents: You’ll receive a copy of the title report and the deed, which will transfer ownership of the property to you.
Settlement Statement: This provides a detailed summary of all the costs linked with the transaction.
You’ll need to pay the funds for your down payment and closing costs during this time. This can typically be done via a cashier’s check or wire transfer.
Once all the paperwork is signed properly and the funds are transferred, you’ll receive the keys to your new home. Cheers, you’re now a homeowner!
05Recording the Transaction
After the closing, the transaction is always recorded with the local government office that manages property records. This officially transfers ownership of the property to your name.
Now, let’s have a closer look at how to prepare for the closing day when buying a house.
01Costs of Closing on a House
It is crucial that you have a crystal clear understanding of exactly how much money you will need to pay in order to finish on closing day. When the closing day approaches, the notary shall prepare you with a statement of adjustments, which briefs all of the total costs (down payment, closing costs, etc.) that are essential in order for the purchase to be finalized.
Pro tip: Please ensure to have a discussion with your realtor and lawyer well in advance of the closing day just to make sure that you have sufficient funds available at your end.
02Make Sure Your Down Payment Funds Are Ready
If you are using funds from your RRSP via HBP, ensure that you’ve informed your bank representative at least one month prior to closing on the property so that the funds will be available.
In another scenario, if you are wiring funds from out of the country or receiving funds from family as a gift, then you’ll have to discuss with your mortgage broker in advance how long that money may be required to sit in your account for the lender to consider it towards your down payment.
Or if you’re just in the starting period of purchasing, your mortgage broker must be able to provide you with a rough estimate for your closing costs as well. So that you know how much you will have left over for your down payment.
03Review Your Contract Again
Do review your contract to make sure that you are aware of all of the included items that the seller should be left behind, as well as any additional terms that were agreed to for closing.
Is that microwave included? Are there any fixtures that are going to be removed by the owner? Ask your realtor to review this with you at the time that you wrote the contract, but refresh your memory before closing so that you can keep track of anything that may be missing when you move in.
Closing day in the Canadian real estate journey is the day you finally call your new house home. It begins with a final walk-through to check that everything matches the contract, followed by gathering essential documents and being prepared to sign paperwork at the closing. You'll need to make payments for your down payment and closing costs, which can vary depending on your property and location. Once the paperwork is signed, you'll receive the keys to your new home, and the transaction is officially recorded. To prepare, understand all costs involved, ensure your down payment funds are ready, review your contract, and conduct a final walk-through for peace of mind. Congratulations, you're now a Canadian homeowner!