Buying Closing Procedures
Complete your home purchase with confidence.
Finalizing a home purchase can be both joyous and stressful. Several processes need to transpire before ownership can be transferred. The following list is a summary of the buyer’s closing procedure prior to taking possession:
You will have to arrange payment of the deposit to your Realtor. The funds are held in Trust until Closing date.
2. Mortgage finalization
Your lender now has to carry out an appraisal of the property and give final approval on your mortgage.
3. Subject clauses and conditions
This is your opportunity to carry out your due diligence. You will want to satisfy your subject clauses prior to signing an addendum to the contract which removing the subject clauses and conditions. Once this has been signed, you contract with the Seller becomes firm.
4. Property Inspection
It is highly recommended to have a property inspection, to find out as much as possible about the integrity of the home you are buying and to make sure you have no surprises when you move in.
Call an insurance company and purchase home insurance to become effective on Closing Date. For condos you will also require third party liability.
6. Title Search
Be prudent and have your lawyer or NP check the title prior to subject removal
7. Lawyer or Notary Public
Once you have selected a lawyer or notary for your real estate conveyancing, I will send them a copy of your contract and put them in touch with the Seller’s lawyer
8. Completion Day
Your lender will forward mortgage funds to your lawyer
Your lawyer provides a Statement of Adjustment with costs payable by you
Your lawyer forwards funds to the seller and completes necessary documents
Title is transferred to you and your name in registered on title in BC Land Titles Office
Bring with you to your lawyer’s office – the remainder of your down payment is given to your lawyer by way of bank draft -payment for the lawyer – ID – your contract
9. Possession Day
Congrats! Your Realtor meets you at the property with keys and you can move in. Check your contract for the time.
10. Completion Costs
These are the fees you will pay on Closing Day. All or some of the following may be included. Check with your lawyer for details.
a) Adjustments – costs you will incur in order to reimburse the seller (such as pre-paid property taxes). On adjustment date the buyer credits the seller with these adjustments.
b) Appraisal – ask your lender if you will be charged an appraisal fee
c) HST – this tax is only applicable to new property. View info on HST. N. B. it is applicable to real estate fees, legal fees, appraisal fees,etc
d)Property Inspection Fee – this will be $425+, the inspection takes 2+ hours
e) Insurance – you may want to insure your personal contents. Condos require you carry third party liability. Your lender will require you to have House Insurance. If you loan is greater than 80% you will be required to have mortgage insurance. Property title insurance is sometimes used in BC.
f) Legal fees – ask your lawyer but it will be $900+
g) Property Transfer Tax – is charged on all properties that are sold in BC and is a Government of BC tax. It is 1% to $200,000 and 2% of the remainder. First time buyers may apply for an exemption, if the purchase price is under a specific amount and if you meet certain criteria
h) Survey fees – your lender will require an updated survey, which confirms the lot size and any encroachments. The seller may have a current one.
i) Utilities – you will want to connect your phone, cable, ADSL etc on possession date and there may be a connection cost for this.