Closing day for a new home is an exciting and important step in the homebuying process. Closing day is when you legally take possession of the house and can officially call it your home! In this article, we have outlined the proper action to take on closing day so that everything is transferred smoothly over to your possession. The closing day process entails taking a final walkthrough of the property, bringing the documents needed to close the property, reviewing the documents and clarifying any concerns, and finally, paying the down payment and closing costs.
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Here’s an overview of what you can expect on closing day so that you don’t miss anything:
Final Walk-Through:
Before the actual closing, you’ll typically have a final walk-through of the property. This is your last chance to ensure that the home is in the condition agreed upon in the contract and that any requested repairs have been completed. Some things you should look for during this walkthrough are:
- Agreed-upon concerns are fixed (appliances, light fixtures etc.)
- Ensure utilities are working and in proper order
- Appliances are running properly
- Heating and cooling systems work
- Structural issues like water damage, mold, holes in the wall etc.
Bring Required Documents:
You’ll need to bring several important documents to the closing, including your identification, proof of homeowner’s insurance, and a cashier’s check or wire transfer for the closing costs and any down payment. Your lender and real estate agent will provide guidance on exactly what you need.
Reviewing Documents:
At the closing, you’ll be presented with a stack of documents to sign. These may include the following:
- Closing Disclosure: This document outlines the final terms of your loan, including interest rate, monthly payments, and closing costs.
- Promissory Note: This is a legal document stating your promise to repay the loan, along with all the details of the loan terms.
- Deed of Trust or Mortgage: This document secures the loan with the property and gives the lender the right to foreclose if you fail to make payments.
- Title Documents: You’ll receive a copy of the title report and the deed, which transfer ownership of the property to you.
- Settlement Statement: This provides a detailed breakdown of all the costs associated with the transaction.
Payment:
You’ll need to provide the funds for your down payment and closing costs at this time. This is typically done via a cashier’s check or wire transfer.
Closing costs vary province by province but typically cost anywhere as low as $16,000 to over $500,000.
For example, if you were to buy a home in Alberta, and let’s say the house sold for $468,519 (the average home price in Alberta in July 2023), then the closing day expenses would be broken down like this:
- Down payment – $23,426
- Land title transfer fee – $428
- Legal fees, title insurance and MISC – $2,000
However, keep in mind these charges depend on the price of the house and the location. In Ontario, for a house that costs $884,000, the minimum down payment would be $63,000, the land title transfer fee would be $10,000, the provincial sales tax would be $2,600 and the legal fees would be roughly $2,000.
Down payments can vary based on the type of loan that you have received, your credit score, and the price of your home. A more expensive property requires a larger down payment. Land transfer fees can range anywhere in Ontario from $0 to $26,000 depending on the market where you are buying the house. Legal fees are generally around $2,000 wherever you go.
Receive Keys:
Once all the paperwork is signed and the funds are transferred, you’ll receive the keys to your new home. Congratulations, you’re now a homeowner!
Recording the Transaction:
After the closing, the transaction is typically recorded with the local government office that handles property records. This officially transfers ownership of the property to you.
Keep in mind that the exact process can vary depending on your location and the specific terms of your real estate transaction. It’s essential to work closely with your real estate agent, so give us a call today! The experienced agents at Zoocasa can walk you through the entire process, right up until you receive the keys to your dream home!
