The closing date of your purchase or sale is the culmination of a great deal of time, money and effort for both the seller and the buyer. To make your closing go smoothly it is important that both the buyer and seller be prepared. This column will provide some tips to ensure that your closing goes smoothly.
If you are buying:
1. Arrange for your movers late in the afternoon on the closing day as most transactions do not close until later in the afternoon. If you are purchasing a condominium, you will likely need the use of an elevator so you should contact the management company well in advance of closing to reserve the elevator.
2. Be prepared for additional closing costs for items such as land transfer tax, CMHC insurance premiums, appraisal fees and adjustments between you and the seller. Your lawyer will provide you with a breakdown of the funds prior to closing.
3. Once the agreement of purchase and sale is finalized, ensure that you arrange your financing well in advance of the closing date. Some mortgage companies require your lawyer to send them signed mortgage documents a few days prior to closing, failing which your lawyer may not receive the mortgage funds on the closing date. You can avoid this by finalizing your mortgage as early as possible so that there are no delays in your lawyer receiving the mortgage documents from your lender.
4. You must arrange fire insurance for the property for the full replacement cost of the property. Your lawyer will need to receive an insurance binder prior to closing. Without this, your lender will not provide the mortgage funds.
5. Contact the various utility companies prior to closing to ensure that there is no interruption of service following closing.
6. If your agreement allows for a pre-closing visit, conduct the visit just prior to closing to ensure that the home is in the same condition as when you signed the agreement of purchase and sale.
7. All purchasers will need to attend at your lawyer’s office to sign the closing documents and provide the necessary closing funds a few days prior to closing. If you are unable to attend at your lawyer’s office, speak to your lawyer to make the necessary arrangements well in advance of closing.
If you are selling:
1. Do not cancel the property insurance policy until you have confirmed with your lawyer that the transaction is closed.
2. Prior to closing, you will need to provide your lawyer with a copy of a mortgage statement from your lender so that your lawyer can request a discharge or payout statement for your mortgage.
3. Similarly, you will need to provide your lawyer with the property tax bill indicating the amount of property taxes that you have paid to the date of closing.
4. All owners will need to meet with your lawyer a few days prior to closing to sign the closing documents. At that time you will need to provide your lawyer with a key to the property which will be passed on closing. If you are unable to meet with your lawyer prior to closing, you will need to make alternative arrangements well in advance of closing.
5. If you are paying for property taxes, monthly condominium common expenses or any other payments by preauthorized payment, you will need to cancel these to ensure that you are not charged for any of these items following closing.
6. Be prepared to move out of the property by 6 PM on the date of closing.
7. You will need to contact the various utility departments to advise them of your moving date and provide them with your forwarding address.
Finally, you should, if possible, avoid selling and buying on the same day. You can avoid this by buying first and arranging bridge financing.
By following these simple steps, you can reduce the stress of closing and ensure that your closing goes smoothly.