Closing Day

1

Closing Costs

It is extremely important that you have a precise understanding of exactly how much money you will need to pay to close your home purchase successfully. When closing day comes, your notary will prepare you with a statement of adjustments. This statement will provide a breakdown of the total closing costs required to finalize the purchase.

The amount owing does not only include the selling price listed in the purchase agreement. It also includes other payments and adjustments, including property transfer tax, legal fees, disbursements, maintenance fees and property tax adjustments.

Make sure to have this discussion with your realtor and lawyer well in advance of closing to ensure that you have sufficient funds available.

2

Make Sure Your Down Payment Funds Are Ready

If you intend to use funds from your RRSP, let your bank representative know at least one month before closing day. This will ensure the funds are available.

If you are wiring funds from out of the country or receiving money from family as a gift, you should discuss this with your mortgage broker in advance. There may be requirements as to how long the funds must sit in your account before being used for a down payment.

If you've just started the purchasing process, your mortgage broker should be able to provide you with a rough estimate for your closing costs. That way, you'll have an idea of how much you will have leftover for your down payment.

3

Review Your Contract Again

Review your contract just before closing to ensure that you are aware of all of the included items that the seller is required to leave behind. Is the microwave included? Are there any fixtures that will be removed? These terms will have been reviewed with you when the purchase agreement was written. Still, it's a good idea to re-familiarize yourself with the particulars of the contract. You should also ensure that any closing conditions have been met.

4

Complete Your Final Walk Through

Your realtor should have included the clause that you can complete another showing of the property before closing. Take advantage of this showing to review the property, making sure everything is as it should be according to the purchase agreement.

Use the home inspection report (completed during conditional period) as a reference to assess the current state of the home. If there has been any damage between signing the contract and closing, let your legal representative know. You'll want to negotiate the costs of any necessary repairs with the seller.

5

Meet with Your Lawyer Typically 1-4 Days Before Closing

Your lawyer will prepare a statement of adjustments outlining what has been paid and what is still owing for each side of the transaction.

Typically, you would go in and sign the documents, hand in the bank draft and two pieces of identification BEFORE the official closing day. This allows the notary or lawyer to ensure that everything is in order for the title to transfer smoothly by the end of the official closing day.

Many notaries and lawyers will work from 9 AM to 5 PM. Make sure that you have planned well in advance to take any necessary time off work to review the statement of adjustments for closing.

It's best not to close during your lunch hour, as an hour might not be long enough. Instead, take some time off work (even a half-day will do!). Be sure to schedule your appointment well in advance, as good legal representatives book up quickly. Do not leave this until the last minute. You should also come prepared with two pieces of government-issued photo ID, your SIN card number, and the bank draft for the closing funds.

6

Avoid an End of Month or End of Week Closing

Some things can go wrong during closing. The information surrounding legal representation will help minimize or avoid unforeseen issues. Some of the most common closing problems include:

• Not having the proper funds to complete closing
• Failing to complete a walk-through before closing and then realizing there are issues with the home
• The Lender pulling funding because your financial situation has changed

If something goes wrong, you'll likely need a day or two to resolve the problem. If you close on a Friday, then that means that you'll have to wait until Monday to get the issue resolved as notaries and lenders are not open on the weekends.

Furthermore, the end of the month can be a busy time for a lot of notaries and lenders. This is because the prepaid interest due at closing accumulates throughout the month. If a closing scheduled on the last day of the month is not completed that day, you will have increased closing costs, beginning at the start of the next month. This risk can be avoided (or reduced) if the closing is near the end of the month.

7

Arrange For Home Insurance on the Property

To obtain mortgage financing, the Lender will likely require you to have insurance on the property. Arrange your home closing insurance coverage well in advance, as the insurance company will have a questionnaire that you need to fill out in detail.

If you are purchasing an older detached home, make sure you ask questions about things like the wiring. Outdated wiring (such as knob-and-tube wiring) may result in a much higher insurance premium. If you are buying a strata property, you will have to look for their insurance as well as it will determine what your insurance will have to cover.

Getting insurance can take time, and you'll likely need to have your realtor send a feature sheet to your broker. You might also need to ask the seller a number of questions to close smoothly.

8

Organize Your Move In Date

After completion has finalized, you are able to move on to the possession day and getting the keys to your new home! The time and date of possession ranges, but you will commonly have possession at 3PM - 5PM. Make sure that you are well aware of the time that you are entitled to receiving the keys, and arrange your movers well in advance as they book up quickly.

If you're dealing with a Condo property, you should give 2 weeks notice that you'll be moving in to the building and also arrange for an elevator key to be given to you on your move in day.

A number of Condos will have a restriction on the hours in which one can move in/move out of the building, so ensure that you are aware of the bylaws so you can be respectful of them.

9

Strategize Your Overlap

If you are both buying and selling properties, dates will be a significant factor for you. To avoid a rushed move, many sellers like to have their purchase complete prior to their home's closing date. That way, they can transition into their new home slowly before having to leave their current property.

In this case, the bank will need to approve you with a bridge loan to complete your purchase before receiving the money from your old home's sale. Given you have two firm offers on both your purchase and your sale, this is often something a bank may offer to you. Typically, you'll only pay interest for the time that you bridge.

If you need to move out of your current home before closing your purchase, ensure that you have a place to stay during the transition time. A storage facility rented on a short-term basis will also help to minimize some of the stress.