Closing day is the culmination of the real estate transaction process and refers to the date on which the buyer(s) officially becomes the owner(s) of the property. To ensure a smooth and stress-free closing, buyers in British Columbia should be well-prepared.
This blog post provides a high-level overview to help buyers understand what to expect on closing day and how to prepare.
1. Review the Contract of Purchase and Sale
Before closing day, thoroughly review the Contract of Purchase and Sale to ensure that all terms and conditions are accurate and agreed upon. It is important to pay particular attention to the following items:
- Purchase price and adjustments: Verify that the purchase price is correct and that any necessary adjustments or credits are reflected.
- Closing date: Confirm the agreed-upon closing date and time.
- Property condition: Review any conditions precedent that must be met before the transaction closes, such as inspections or repairs.
- Financing: Ensure your financing is in place and all necessary documentation has been submitted to your lender.
- Insurance: Ensure that property insurance coverage will be effective as of the closing date.
All purchasers should also consider preparing an emergency fund to cover unexpected expenses arising after closing.
2. Gather Necessary Documents
In addition to the Contract of Purchase and Sale, you will need to gather several other documents for closing day, which may include:
- Government-issued identification: Proof of identity, such as a driver’s license or passport.
- Financing documents: If you are obtaining a mortgage, you must provide your lender with any required documentation, such as proof of income and creditworthiness.
- Property insurance: Proof of property insurance coverage.
- Funds for closing costs: Ensure you have sufficient funds to cover the closing costs, including legal fees, land transfer tax, and mortgage insurance premiums.
3. Conduct a Final Walkthrough
Before closing, the buyers will conduct a final walkthrough of the property to verify it is in the agreed-upon condition in the Contract of Purchase and Sale. In most cases, your realtor will have added a term in your Contract of Purchase and Sale that allows you to see the property before closing. This walkthrough aims to provide the buyers with an opportunity to identify any damage or repairs that need to be addressed before the property is transferred.
4. Understand Closing Costs
Closing costs are fees paid by both buyers and sellers at the time of closing. It is crucial to thoroughly understand closing costs to know exactly how much money you will need to pay to complete the closing. These costs can vary depending on the transaction and the location of the property, but typically include:
- Land transfer tax: A provincial tax levied on the purchase of real property.
- Legal fees: Fees your lawyer charges for representing you in the transaction.
- Mortgage insurance premiums: If you are obtaining a mortgage, you may be required to pay mortgage insurance premiums.
- Property taxes: You may be required to pay all or a portion of the property taxes for the year of closing. Adjustments for this will be made by your lawyer in the statement of adjustments.
- Disbursements: Fees paid to third parties, such as appraisers, inspectors or surveyors.
5. Sign Closing Documents
In the days leading up to the closing, you will meet with your lawyer to sign a final package of documents to finalize the transaction. Be prepared to sign several documents, including the deed of transfer, mortgage documents (if applicable), title insurance, title to the property, land transfer tax, and any other necessary paperwork. Your lawyer will also have a statement of adjustments outlining the amounts already paid, reflecting any credits or adjustments, and highlighting the amounts owing to complete the transaction.
6. Post-Closing Steps
After the transaction has officially closed, there are still a few essential steps to be completed:
- Recording the deed: Your lawyer will ensure that the deed of transfer is registered with the Land Title Office to recognize you as the owner of the property.
- Change your address: It is important to update your address with all of your important accounts, such as your bank, credit cards, and driver’s license with your new address, if applicable.
- Notify your insurance company: It is essential to inform your insurance company of your new address and any changes to your property coverage.
- Obtain possession: Once the deed is registered and you have keys to the property, you can take possession of the property.
Additional Tips for a Smooth Closing
Preparing for closing day is a crucial step in the home-buying process. By following the guidelines outlined above, home buyers in British Columbia can help ensure a smooth and stress-free closing. It is important to remember that the closing process may vary depending on individual circumstances, so it is always advisable to consult with your real estate lawyer for personalized advice.
Throughout the process, it is essential to maintain communication with your lawyer and keep them informed of any changes or developments that may affect the closing. During the process, it is imperative to be organized and gather all necessary documents well in advance of closing day. If you have any questions throughout the process or about closing day, it is important to ask your lawyer for clarification. Finally, home buyers should be aware that closing can sometimes take longer than expected, so it is crucial to be patient and be prepared to wait.
Contact CM Lawyers for Knowledgeable Real Estate Advice in Vernon & Salmon Arm
At CM Lawyers, our team of experienced residential real estate lawyers frequently represent and advise property purchasers on a variety of real estate matters. From an initial review of your Contract of Purchase and Sale to closing day, our real estate team will work closely with you to ensure that your needs are met and your closing goes as smoothly as possible. If an issue arises during the process, our team will advise you of your options and work with you to address disputes before they pose a serious problem.
CM Lawyers proudly serves clients throughout Vernon, Salmon Arm, Northern Okanagan and Shuswap. To schedule a consultation with one of our real estate lawyers regarding your property purchase or sale, please contact us online or call our Vernon office at (250) 308-0338 or our Salmon Arm office at (250) 803-9171.