There are lots of emotions involved in buying a house. So, when closing day finally comes around, and the deal gets done, it can feel like a weight lifted off your shoulders.
That said, not everyone understands what happens on closing day, who’s involved. and why it’s such a major part of real estate transactions. If you’re buying a house for the first time (or it’s been a while), you may be in this boat too.
As one of Canada’s longest-serving real estate teams, we know the processes of buying and selling homes like the back of our hands. In this blog, we’re demystifying closing day to help you know what you can expect and what responsibilities you may have.
Why Closing Day is so Important
It’s no secret that real estate transactions are complicated. In fact, it’s one of the reasons why working with an experienced and knowledgeable real estate agent is essential to your success.
In simple terms, closing day is when a number of financial and legal steps in your home purchase get finalized. At the end of closing day, the transaction is officially a done deal, and your new home can be legally transferred to you from the current owner.
Given just how crucial it is to the completion of the transaction, there’s a lot on the line on closing day. This may sound anxiety-inducing, but if you’ve got the right professional support by your side, you should make it through without any hiccups.
Become an informed home buyer by checking out these related blogs next:
- Will I Ever Be Able to Afford a Home?
- How Much Do You Need to Make a Deposit & Down Payment?
- How Long Should You Plan Ahead Before Buying a Home?
When is Closing Day?
Keep in mind that buying a house takes time. You won’t be closing on your new home the same day you make an offer. Instead, closing day is usually a few weeks or even months away from when your initial offer is accepted – in Ontario, it’s typically around 30 to 60 days. However, your exact closing date will be outlined in your purchase agreement.
It’s also worth noting that some elements of the closing process can be done in advance, while others must be completed on the day of closing specifically.
What Happens on Closing Day
Now that we’ve gone over the basics, let’s dive into what actually happens on closing day.
You Do a Final Walk Through of the Home
The first step of closing day is a full top-to-bottom walk of the house with your real estate agent. The purpose of this step is to make sure the property is in the proper condition it should be before you begin closing. If there were any required changes, modifications, or repairs to be made as part of your purchase agreement, this is your chance to verify that they’ve been completed.
Money Gets Moved
Once you and your agent have confirmed that the house looks good, you can start the financial and legal aspects of closing. This is where your lender and real estate lawyer come in.
First, your mortgage provider will transfer the total mortgage amount to your lawyer. This can be done directly or with you as an intermediary. You will also pay your lawyer any other due expenses that are separate from the mortgage. Once received, your lawyer will transfer the money to the seller.
Closing day moves fast. As a buyer, it’s important to have all the necessary funds ready to go. For example, if you need to withdraw from an FHSA or RRSP to fund your purchase, this will need to be done in the days leading up to closing.
Documents & Paperwork
After all the money has been transferred, there will be a stack of paperwork to get through. Luckily, your lawyer will do most of this on your behalf. Once they’ve registered the property in your name and transferred the title, it’s officially yours. You’ll receive the keys from either the seller, their real estate agent, or yours.
Don’t forget, as a home buyer in Ontario, you’re responsible for paying Land Transfer Tax (LTT) after closing. If you just bought a place in Toronto, you’ll be on the hook for municipal LTT as well. Thankfully, there are LTT rebates available for some first-time buyers in Canada. You can ask your real estate agent or accountant whether or not you qualify for this relief program.
About to buy a house? You might find these related blogs helpful!
- Red Flags to Look Out For When Buying a Home
- How to Tell a Buyer’s Market From a Seller’s Market
- Why Do You Need a Real Estate Agent?
Buying With Bosley
Bosley Real Estate has helped Canadians find the perfect home for close to a century. Today, our advanced buying systems, client-first approach to service, and vast industry relationships can help you build a thoughtful home-buying roadmap, leading to a smooth and successful home purchase.
Buying a home? Our team of experienced agents can help you achieve your real estate goals. Give us a call at 416-322-8000 or reach us by email at info@bosleyrealestate.com.
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