Avoiding Pre-Closing Chaos: A Helpful Checklist for Home Buyers
Your closing date is circled on the calendar. You have officially signed an offer to purchase your next home, and are already turning your mind towards just how you’re going to pack all of your stuff. Before you break out the boxes though, there are a number of steps in between agreeing to and closing your real estate deal.
To avoid any unnecessary confusion, we wanted to lay out a helpful, step-by-step pre-closing guide that should help walk you through an otherwise complicated process.
Find the right real estate lawyer. A real estate lawyer will guide you through your transaction, and is well-equipped to assist you with all the legal elements involved. Your lawyer will do the bulk of their work in the days before your closing, but it is important to find one early on so that they can represent your interests throughout the entire process.
Obtain your mortgage paperwork. Whether you are going through your bank or through a mortgage broker, whoever is preparing your mortgage will have a number of questions for you in order to get your documents ready. Once the mortgage documents have all been prepared, make sure that you provide them to your lawyer who will help you review all important elements. Remember, make sure that you are pre-qualified for your mortgage before agreeing to a purchase so that you know exactly what you can afford.
Schedule a pre-closing visit to the property. You may have last seen the property on a site visit shortly after you agreed to the purchase, but this may have been two or more months prior to your closing date. Re-visit the property with your agent to ensure that everything is still in the same condition as it was when you agreed to the purchase. If you notice any defects prior to moving in, your lawyer can then account for them in your deal.
Set up your insurance. Fire insurance,for example, must be in place for the full replacement cost of the home. The property should never be uninsured, even if you are conducting renovations prior to moving in. Even property purchased from a relative through a private sale should never go uninsured. If you own your current home, your home insurance does not automatically transfer to your new home, so speak with your broker about what to do with your policy.
Discuss the status of utilities. Your lawyer will work with you to confirm what is happening to the utilities at your new property. Essential utilities such as hydro and water may be transferred to you, while others like cable and internet you may need to set up yourself after you move in. Make sure that this conversation occurs while in advance of closing so that necessary arrangements can be made without a last-minute scramble.
Speak with your lawyer about your title arrangements. If you are buying the new property with a partner, you will want to discuss with your lawyer whether you will be making the purchase as joint tenants, or tenants in common. When spouses own a home as joint tenants and one dies, the other automatically inherits the property. With a tenancy in common, you can will your interest in the house after your death to anyone outlined in your will, such as your children.
Make sure that you can cover all closing costs. The home buying process can become a jumble of numbers, but there are a number of costs associated with closing that will come as a surprise without some pre-planning. Your lawyer will receive a statement of adjustments before closing that will outline all of the property taxes, potential mortgage insurance taxes (if paying less than 20% as a downpayment), and any other amounts owing at the date of closing. This might adjust the numbers that you were expecting in your head, so plan accordingly for some variation in your final calculations.
Book your lawyer’s appointment BEFORE closing, not on the day of. Closing day on a property operates like a sequence of falling dominoes, with each step happening in sequence to keep the process running smoothly. Make plans to see your lawyer at least two days prior to closing so that you can sign off on any final documentation, and provide the lawyers with the funds they will need to make your purchase.
Make a change of address list. While you can obtain a change of address form from Canada Post for your mailing address, you will also need to change your driver’s license, as well as notify your financial institutions, credit card companies, utility providers, health care providers, relatives, friends, et cetera.
Schedule your movers. Avoid scheduling your move for any time before late afternoon on the day of closing. Your deal may not close until the end of the day, and that is provided that everything runs smoothly. While it may be tempting to spend your first night in your new house, an extra night in a hotel may help avoid a hectic late night move that will undoubtedly end in frustration and fatigue.
Think about last-minute logistics. Moving into a new home is hectic even without having others to worry about. Do whatever you can to make your movers’ job simple, and ensure that they have an unencumbered path through both properties. If you have young children or active pets, consider leaving them with friends and relatives for the day so that you can focus on welcoming them into a comfortable environment for them to settle in.
New homes are exciting, but walking through the door well-prepared can make closing your deal and moving in that much easier.
At Sari Rose Law, we understand home buying backwards and forwards. We also handle home sales as well - stay tuned for our sellers checklist coming shortly. We handle all matters involving real estate purchases, and would be pleased to help ensure that your deal goes as smoothly as possible. Contact us today to find out how to get started.