ROADMAP FOR BUYERS
Your offer to buy a home has just been accepted. Congratulations. But the process of buying your new house isn’t quite over yet. So, what’s next? To make a smooth transition to your new home you have to take care of the remaining steps ahead of closing. You will not be left alone we will be with you every step of the way.
Please keep in mind that in real estate transactions “time is of the essence”. It means that the conditions must be satisfied by the dates stated in the Agreement of Purchase and Sale. Otherwise, your closing could be delayed with yourself being responsible for the costs, or in worst case scenario the Agreement could be voided. You and all others listed on the Agreement of Purchase and Sale must be available to execute closing documents before closing date. If you anticipate not being available prior to closing, let us know immediately in order to have time to resolve this problem. One solution may be through the use of a Power of Attorney if allowed by your Lender.
Here is an outline of what you need to do for most standard purchase transactions:
- Pay the deposit upon acceptance of the Agreement of Purchase and Sale. If the Agreement of Purchase and Sale provides for the additional deposits at a future date make arrangements to deliver postdated cheques. This certainly will be the case if you are buying a new home or condominium from a builder.
- Satisfy and waive any outstanding conditions which are specified in the Agreement of Purchase and Sale, such as financing, home inspection or lawyer’s approval of condominium Status Certificate on or before the stated dates.
- Bring your contract for review to our office. We will highlight the paragraphs that need to be changed, if any, suggest necessary amendments to protect your interests. It is advantageous to review your signed Agreement of Purchase and Sale before the conditional period has expired and your deal becomes firm, or if you are buying from a builder, before the cooling-off period ends.
- When you are buying from a builder it is important to remember that the the Agreement of Purchase and Sale was prepared by the builder’s lawyer with the builder’s best interest in mind. Moreover, when buying from a builder in most cases the selling price is not the full price you will be paying on closing. Usually, the builder includes additional charges such as government taxes and levies, the costs of utility meters and connections, development charges, park levies, landscaping charges, contribution to the reserve fund and sometimes even a fee for paving the driveway in the body of the Agreement of Purchase and Sale. Those charges will significantly increase the purchase price unless removed from the Agreement or capped by your lawyer.
- Provide your lender or a mortgage broker with the name and telephone number of your lawyer as soon as possible.
- Arrange any mortgage financing which you might require to complete the transaction. Satisfy any and all special requirements by the lender well in advance of the closing date. These conditions may include proof of income, proof of down payment, proof of payment of existing debts or providing the lender with your Notices of Assessments from the Canada Revenue Agency for the last couple of years.
- Provide the name and contact information of your lawyer to your lender or mortgage Broker as soon as possible.Arrange for the accepted offer and mortgage approval /commitment from the lender to be sent to our office as soon as possible. Remember, that all people that signed the mortgage documents must be registered on title.
- Let us know how you and any other co-buyers will be registered on title to the property. Provide our office with the birthdays, full legal names and first time buyer status, if applicable, of any and all Purchasers. Please keep in mind, that the spelling of the legal names should be the same as is written in Canadian legal documents such as a Canadian Passport or Driver’s Licence.
- Discuss with us the closing costs including lawyer’s fees and disbursements, Title Insurance, registration fees, Land Transfer Tax, and mortgage adjustments, if applicable.
- If you are buying a new home or new condominium from a builder, we will discuss the Ontario New Home Warranty Program (TARION), what it covers, and for how long, what it does not cover, and what are the rules regarding delayed closings.
- Learn the advantages and costs of Title Insurance coverage for the purchase of your property.
- If you are a first time buyer, you may wish to learn about the Home Buyer’s Plan from your mortgage broker or financial adviser. The Plan allows you to borrow money from your RRSP account towards your down payment if the property will be owner occupied.
- We will discuss with you the Land Transfer Tax rebate criteria and determine if you are eligible for the rebate. We will advise you about the amount of the rebate and will apply before closing, to ensure that you will receive the benefit at the time of closing.
- Arrange fire insurance coverage and have your insurance company or broker send a” binder letter” to our office prior to closing. The coverage should be effective of the closing day. The binder should contain the name of the insurer, the amount of coverage, the expiry date and the lender’s name and address for service. Coverage should be for the full insurable value of the building excluding land, on a full replacement cost basis or the value of the mortgage, whichever is greater. If fire insurance is not arranged before the closing date, the lender will not advance mortgage funds on time.
- Make arrangements with the various utility companies, including gas, hydro and water to have new accounts set up in your name, utility meters read on closing, and the final bills sent to the Seller.
- If you are buying a new home or a condominium from a builder, conduct the Ontario New Home Warranty Program pre-delivery inspection. Ensure that all deficiencies you see, possible problems and omissions are noted on the Certificate of Completion even if the builder’s employee conducting the inspection suggests otherwise. If the problem is not mentioned in the report, the builder will not have a legal obligation to rectify it after the closing.
- Meet with us shortly before the closing to review and sign the purchase and mortgage documents. You will also have to provide our office with the closing funds “in trust” for the remainder of your down payment, closing costs and disbursements. The funds have to be in the form of a certified cheque or money order payable to “Wojcik Professional Corporation in Trust”. The balance of the purchase price will be provided by the lender as mortgage funds.
- When you attend our office to execute the closing documents you will also have to provide us with two forms of personal photo identification for each Buyer. At least one of the types of identification must be a Canadian or Provincial Government photo ID, keeping in mind that an Ontario Health Card is not a valid identification for this purpose.
- Following the completion of the transaction you will receive the Transfer confirming your ownership of the property along with the keys from our office or another arranged location, such as the builder’s construction site, usually in mid or late afternoon on the day of closing.
- The Seller must move out of the property as soon as the title changes hands. Since most transactions close in the afternoon, in order to avoid unnecessary moving costs, it will be a good idea to arrange with the movers for an early evening moving time or schedule it the next morning.
- You may consider changing the locks on your new property as it is impossible to know if copies of the keys exist and who has them. You may also wish to record or take a digital picture of the utility meters in the event that the meters are not read by the appropriate companies.
As your home buying journey ends we wish you and your family many memorable years in your new home.