Behind the scenes of closing day
Closing day is the day when all the parts of buying and selling a home
come together. Each party’s lawyer will have successfully completed
the details required to ensure all legal aspects are covered. On this
day, you will take possession of the home, get the keys and perhaps
even move in. It is also a busy time for the seller, as they will likely
be in the midst of moving. However, before that day arrives, there are
closing details to complete to ensure the smooth transfer of the property.
A lawyer represents your interests, and ensures that the legal documentation
is properly completed. Your lawyer receives a copy of the offer. He or
she reviews the conditions of the sale, the contract and the information
for title transfer and registration. Every condition on the offer must
be met by closing date.
It is your lawyer’s responsibility to search the title of the property
(at the registry office) to ensure that the home is purchased without
any legal problems and that there are no liens on the home or the personal
property of the seller that forms part of the agreement.
Your lawyer also needs to contact the municipality for taxes, zoning
compliance (permits, use, setbacks, pool, fencing, compliance with subdivision
agreements, etc.) and public utilities (hydro, gas, etc.) within the time
stated in the offer, to ensure that no taxes are outstanding and the home
meets with established guidelines.
Preparing a statement of adjustment is also part of your lawyer’s
duties. This confirms the selling price, adjustments and the balance
(less the deposit you provided with the offer). The lending institution
will also draw up a certified cheque for your lawyer to be held in trust.
With the purchase price of a resale home, the closing is always “subject
to usual adjustments.” This means that any amount that the seller
has already prepaid will be adjusted so that the home buyer pays the excess
amount back to the seller and vice versa. These adjustments can include:
municipal property and school taxes, monthly condominium maintenance fees,
first and last month's rental for rental properties that may be in the
home, utilities, such as hydro and water including GST. Your lawyer will
prepare a statement of these settlement charges.
Surveys and Inspections
Your lender requires an up-to-date land survey. This document records
the location of the home on the lot as prepared by a certified land surveyor.
It records any changes to the exterior of the home since construction.
Any additions such a deck or building additions could affect your taxes,
property assessments and zoning restrictions.
If a home inspection was part of the conditions, it should be completed
by the date specified in the contract. You should also be satisfied with
the report, and any repairs requested as a result of the report results.
If you were planning to purchase a resale car, you would want to avoid
the headaches of choosing a lemon. You would most likely have it inspected
by a mechanical service or a mechanic you know.
When you are purchasing a home, why take a chance on unexpected
headaches and money? You will want to make a careful tour of the home,
not only yourself, but with a professional inspector. Spending $400-600
is money well spent, as the inspector will conduct a thorough inspection
of the home, and provide you with a report detailing any potential problems.
Based on workmanship, average length of time for operating efficiency,
the inspector can give you a good idea of the condition of mechanical
items of the home and repair costs down the road. An inspector will not
pass or fail the home. Rather, he will give you an unbiased opinion
of its condition.
Financial details should be finalized and ready for implementation on
the closing date.
Contact utility, cable and phone companies to ensure connections are in
place on your moving day.
Update your insurance policy so coverage begins on your new home and property
upon closing. Your lawyer also needs a copy of the policy before closing.
Completing the contract
On closing day your lawyer pays the vendor, registers the home in your
name and delivers the title and keys. Be sure you have all the keys, including
side door, garage door, shed, mailbox, garage door opener, etc. You may
want to change the locks or have them re-keyed.