Buying a home is an exciting time during which you are both securing your future and creating a wonderful space to build memories. Yet many first time buyers also have questions about the process. What to expect on closing day is a common topic that is brought up from prospective buyers. We’ve put together a list of the basics so you’re prepared when this landmark day arrives.
What is Closing Day?
Closing day is the final step of the purchasing process and the day when you will have your new home transferred to you from your builder. It’s a happy day for home buyers, yet there is a lot of prep before the celebrations can begin. By closing day, you already have selected your upgrades and secured financing on your new home, found a lawyer to guide you through the process and completed a final walkthrough of your house to ensure everything is up to standard. You will have signed an agreement of purchase and sale, which outlines critical construction dates, including the closing. If all goes smoothly, here’s what to expect on closing day of your new construction home.
Your Lender Will Provide The Mortgage Payment to Your Lawyer
Your lawyer is responsible for transferring your down payment and other fees (more on those later), to the home builder. Moving these large sums of money to your lawyer can take time, so you will want to start the process several days before closing day. Note that depending on where you live, a notary could be responsible for this instead of a lawyer. You will only be able to pick up your keys and receive the deed to your new home once the builder has confirmed that all funds have been transferred. This can take some time, so closing meetings are typically scheduled in the morning.
Other Fees Besides Mortgage Funds Will Be Paid on Closing Day
A trustworthy home builder will be transparent about additional fees when you are signing your purchase agreement so you know what to expect on closing day. Common expenses to be paid on closing day are land transfer taxes, title insurance, and utility connection fees. In addition, in Ontario and several other provinces, Tarion Home Warranty is required when purchasing a new construction home. This benefits you since it protects against any defects that might become apparent only after you’ve moved into your new home, such as problems with heating or plumbing.
You Will Be Signing Documents (Lots of Them)
Buying a home will most likely be the biggest purchase of your life, so expect there to be a lot of paperwork. A property deed, bill of sale, transfer tax declaration, and a mortgage agreement are just some of the documents you will sign. All this paperwork is why a lawyer is necessary since the legalese can be a bit overwhelming. A quality builder, however, will demystify the process and make sure home buyers are clear on the contract terms. Once this step is done, all that’s left is to transfer the home into your name!
Your Lawyer Will Transfer the Home Into Your Name
Once your builder can confirm that the mortgage funds have been received, your lawyer will register the home into your name and give you the deed. Congratulations, all that’s left is to pick up your keys! Usually, builders like to have you drop by their office and pick up a welcome package, including keys, in the afternoon. This allows enough time to ensure the funds have been received.
Not all new construction home buyers know what to expect on closing day, so we hope we have illuminated the process. As long as you prepare with your lawyer and lender ahead of time, we’re sure your closing day will go smoothly! Follow along on the Caliber Blog for more home buying tips.