Closing day is an exciting and often emotional milestone for buyers and sellers alike. Many of the buyers I work with are eager to begin this new chapter in their lives. Sellers, on the other hand, may experience some nostalgia as they bid farewell to a home filled with family memories.
Over the years, I’ve learned preparation and a good dose of patience are key. Closing day – and the days leading up to closing day – can be stressful and though your realtor and lawyer will do most of the closing work, there are things you need to do. I’ve put together a checklist for buyers and sellers to help ensure the process goes as smoothly as possible.
CLOSING CHECKLIST FOR BUYERS
Immediately begin satisfying any conditions of the agreement that require action on your part. Your realtor can complete documents stating the conditions have been satisfied.
Work with your lawyer.
Have him/her search title to the property and find out how much money you’ll need for closing day. This will include transfer tax, legal fees and disbursements, and an estimate of closing date adjustments.
Lender Appraisal Policy.
Ask your lender about their appraisal policy before arranging a mortgage loan. This is to ensure they’ll provide all approvals before you waive any finance condition. Remember, if their appraisal indicates your home is worth less than you paid for it, they may advance a lesser amount than you expect on closing date. You don’t want any unexpected surprises just as you’re about to close.
Home Insurance Policy.
Arrange for a home insurance policy to be effective on your closing day. Your insurance letter will issue a ‘binder’ letter certifying your coverage, which you’ll need to obtain your mortgage. If you’re purchasing a condominium, you need a policy to protect your contents and liability.
Arrange a moving time.
You likely won’t receive the keys to your new home until late in the day so arrange moving time accordingly. You may even want to schedule the move for a day or so after closing, especially if you want to paint the house or replace flooring. If that’s the case, you’ll need to arrange bridge financing with your lender. If you’re moving into a condominium and need to use the elevator, contact the management company in advance to reserve the elevator.
Announce the move.
Inform all utility, newspaper, cable, phone, alarm system and internet suppliers of your upcoming move. You may need to provide security deposits for hydro or gas accounts at your new home before service is provided. After closing, inform any credit card companies, doctors’ offices and government departments, such as the Ministry of Transportation to update your driver’s licence.
Contact utility companies and make sure they read the meters on closing so you’re responsible only for charges after you move in.
Contact your lender to finalize your mortgage documents and have your lawyer review them before signing.
Schedule your pre-closing visit with your realtor to conduct your final inspection to make sure the home is in the same condition as when you signed the offer.
Meet your lawyer a day or two before closing. Your lawyer will receive a statement of adjustments just before closing. These could add to your closing costs if the seller has prepaid some expenses, such as property taxes.
You legally take possession of your new home on closing day and final signings typically take place at your lawyer’s office. Your lender will give your lawyer the mortgage money and you then give your lawyer the down payment minus the deposit and closing costs. Your lawyer or notary then pays the seller, registers the home in your name and gives you the deed and keys to your new home.
Check all appliances and home systems immediately after moving in. In most agreements, the seller warrants everything will be working on real estate closing date. If there are any problems, you need to notify the seller immediately after moving in to be able to bring a claim later for repairs.
CLOSING CHECKLIST FOR SELLERS
Your realtor and lawyer will take care of most of the legal requirements. Here’s your checklist:
Advise your lawyer that an Agreement to Purchase has been signed and ensure s/he is ready to close the transaction.
Immediately begin satisfying any conditions of the agreement that require action on your part, such as repairs.
Contact the utilities, telephone and cable companies about transferring or removing service. Your lawyer will often handle the transfer of utilities. Arrange to have your utility meters read on the day of closing to ensure you’re responsible only for your share of utilities. If the home you sold is heated by oil, arrange to fill the fuel oil tank as of closing day and pay the cost of filling the tank at that time.
Call your insurance agent and arrange cancellation or transfer of your homeowner’s insurance – but only when you’re sure the deal has closed. If you’re moving about more than 30 days before closing, let your insurer know the house will be vacant so you’re covered should anything happen in the house up to the closing date.
Contact a moving company to arrange your move on or prior to closing date. As you have to be out of the property when it closes, arrange to move out before 5 p.m.
Issue change of address notices and advise the post office of your move. Notify the Ministry of Transportation about your new address for driver’s licence and registration.
Notify your realtor immediately if anything about your property changes.
If you plan to discharge or pay off your mortgage with proceeds of the sale, your lawyer will obtain a statement from your lender showing your outstanding balance on the mortgage and any penalties you’ll have to pay.
A few days before closing, meet your lawyer to sign the paperwork that allows the title to be transferred to the buyer. You’ll also hand over a set of keys, which will be passed along to the buyer’s lawyer at closing.
On closing day, your lawyer will receive and distribute the proceeds from the sale, pay off your mortgage and other costs, and give you a cheque for net proceeds.
Please know I am dedicated to providing the best client care possible and will be by your side to protect your interests and help you through every step of the process. I look forward to working with you!