The completion day in real estate, also known as the closing day, is the date the property is transferred, and the day the money for the purchase is transferred from the buyer to the seller. The closing day in a house transaction is a huge milestone for both the seller and the buyer, and it’s important for both parties to work together to ensure that it goes smoothly.
Once you have an accepted offer, have your realtor send the contract of purchase and sale and associated documents to the mortgage broker and your notary/lawyer to get the process started. After that, you’re officially on the path of working towards the completion date in real estate! Regardless of whether you are on the buy or sell side, this blog post provides you with a checklist to consider before the closing date.
Here’s a checklist if you are SELLING:
- You will visit your lawyer a few days before closing to sign the papers and review the statement of adjustments. Arrange for a time to meet your lawyer and review their office hours as you may need to take an hour off of work to match their schedule.
- Review the contract minimum one week before you move to make sure you are crystal clear what should be left for the buyers and what can be taken.
- Clean the property to a professional standard, preferably after all of your belongings are already moved out.
- Obtain change of address forms from the post office. For a small charge, you can also arrange for your mail to be rerouted to your new home.
- Make sure you have given your lawyer a copy of any deed, mortgage, survey and current property tax bills. You should have received these from your lawyer when you bought the house.
- Do not cancel your household insurance policy until you have heard that the deal has closed. Also, if you are moving out more than 30 days before closing, you need to notify your insurer that the home will be vacant. This way, you will still be covered if anything happens in the home up to the closing date.
- If you are a non-resident of Canada, you must obtain a certificate from Canada Revenue Agency regarding any income tax payable, or else the buyer will be holding back 25 per cent of the sale price until you do get it. Non-resident means you have not lived in Canada at least 183 total days in the past year before the closing day. This can take up to two months so let your lawyer know right away so that the proper application can be filed.
- Have all your utility meters read on the day of closing. That way you will only be responsible for your share of utilities. Also notify your cable and telephone provider so that your service can be disconnected. If you have an oil tank make sure to have it before your sale closes, and provide a receipt to your legal professional if required.
- Cancel any pre-authorized or postdated cheques associated with your home at your bank, to make sure you don’t pay for anything after closing.
Here’s a checklist if you are BUYING:
- Schedule your pre-closing visit shortly before closing so that you can conduct your final inspection to make sure that the home is in the same condition as when you signed the offer. Note: Your realtor should have added a clause in the contract allowing you to come back and visit the property prior to completion at least once otherwise your pre-closing visit is at the discretion of the sellers approval.
- If strata, contact the property management/strata to let them know your move in date a minimum of 2 weeks before possession. Furthermore, if you’re moving in to a condominium then you will likely need use of the elevator along with the key to hold it. You will likely have to put down a deposit for the key and also pay a non-refundable move in fee for strata properties at the time of closing. Refer to the bylaws to avoid any surprises.
- Contact an insurance broker and obtain property insurance. Do not leave this to the last minute. If it is a strata property, you will also need the insurance note for the strata in order for your broker to cross-reference and ensure that you are fully protected.
- Make sure your mortgage broker has everything they need to satisfy the lender well before completion. Make sure you have provided the lender with all required proof of income, or down payment well in advance so that it does not delay the money. Arrange mortgage financing, if required, and advise you lender to send all mortgage documents to your lawyer’s office at least two (2) weeks before the scheduled closing date, if possible.
- Make sure you have enough money to cover your closing costs for completion. Your lawyer will be receiving a statement of adjustments just before closing, and you may have costs that you’ll need to cover to complete such as prepaid expenses made by the seller. Find out exactly what this is as it can add up to 1 per cent more to what you may owe. Common closing costs will be property transfer tax, maintenance fee adjustments, property tax adjustments, and lawyer fees.
- You will need to deliver, at least 2 days before closing, the balance of money needed for your lawyer to close the deal. This will most likely be by certified cheque, money order or bank draft – consult with your lawyer beforehand to determine how you will need to deliver the funds.
- Meet with your lawyer before completion to discuss the statement of adjustments and also let the lawyer know how you will be taking title to the property. If you take as joint tenants and one of you passes away, the other party immediately becomes the owner. If you take as tenants in common, you can transfer your interest to a beneficiary under your will.
- Consider title insurance and consult your lawyer. This will protect your property against title defects, survey issues, work orders and frauds while you own the property.
- Arrange for your cable and telephone providers to install service on the day of possession, or immediately after.
- Contact the utility companies, to make sure they read the meters on closing, so that you are only responsible for charges after you move in. Contact the municipality and other utilities (water, gas and hydro) to advise them of the ownership change.
- Obtain change of address forms from the post office to your new home.
- If you rent your present home, give necessary written notice to your landlord as per the tenancy act and make arrangements for the return of any monies you have on deposit.
Are you looking to buy or sell in the near future? Give us a call at 604-765-0376. Prefer text? 604-319-0200 or email [email protected] to start a conversation. We’re here to help.