Property Issues - Closing the deal

Closing day is the day you become the official owner of your home and/or property. However, the entire closing process usually takes a few days.

Typically, you visit your lawyer’s office to review and sign documents relating to the mortgage, the property you are buying, the ownership of the property and the conditions of the purchase. Your lawyer will also ask you to bring a certified cheque to cover the closing costs and any other outstanding costs.

Once your mortgage and the deed for the property are officially recorded, you become the official owner of the property and your lawyer will call you to pick up the keys to your new home.

Determine what you can afford
Buying a home involves both one-time costs and more regular monthly expenses. It’s important that you take both into account when you’re figuring out how much you can spend on a home.

The largest one-time cost is the down payment, which usually represents up to 25% of the total price of the property. Then, in addition to the actual purchase price, there are a number of other expenses that you may be expected to pay for.

Typical One-Time Expenses

  • Mortgage application and appraisal fee (paid at time of application)
  • Appraisal fee (paid at inspection)
  • Property inspection (optional) (paid at closing)
  • Legal fees (paid at closing)
  • Legal disbursements (paid at closing)
  • Deed and/or mortgage registration (paid at closing)
  • Property survey (sometimes provided by seller) (paid at closing)
  • Land Transfer, Deed Tax or PropertyPurchase Tax (in Quebec within 3 months following signing) (paid at closing)
  • Mortgage interest adjustment and take over fee (if applicable) (paid at closing)
  • Adjustments for fuel, taxes, etc. (paid at closing)
  • Mortgage insurance (and application fee if applicable) (paid at closing)
  • Home and property insurance (paid at closing and on-going)
  • Connection charges for utilities such as gas, water and electricity (paid on date of move)
  • Moving expenses (paid on date of move)

Other costs may include landscaping, decorating, furnishings, appliances and repairs. Typical monthly costs include mortgage payments, maintenance, insurance, condo fees, property taxes and utilities.

Protect your home with insurance
When you purchase a home, you have several insurance options that will protect your investment in different ways.

Homeowners’ Insurance
Most mortgage lenders insist on fire insurance coverage that is at least equal to the loan amount or the building value, whichever is less. You should also consider a homeowner’s policy that combines fire insurance on the building and its contents with personal liability coverage. Consult your general insurance agent for professional advice.

Mortgage Life Insurance
When lenders refer to mortgage insurance, they’re referring to coverage that’s provided by CHMC or MICC for a high ratio mortgage. Mortgage Life Insurance (MLI) is optional, inexpensive coverage on your life, which protects your beneficiaries by paying off your outstanding mortgage in the event of your death. MLI premiums are based on your age and mortgage amount. The premium is added to your mortgage payment so there’s no extra paperwork, and it remains the same until your mortgage is paid off.

Disability Insurance
Disability Insurance provides replacement income if an accident or illness prevents you from working.

Job Loss Mortgage Insurance
Job Loss Mortgage insurance covers the mortgage payments in the event that you involuntarily lose your job.

Making an offer
When it comes time to make an offer, I will provide current market information and help you draft a suitable offer. I will then communicate the offer to the Seller’s Agent on your behalf. In a “Hot” market, there could be more than one offer on a property (Multiple Offers). I will guide you through this process.

An Offer to Purchase*
An Offer to Purchase is a legal document which specifies the terms and conditions of your offer to purchase the home. The offer can be firm or conditional.

Firm Offer to Purchase: preferable to the seller because it means you are prepared to purchase the home without any conditions. If the offer is accepted, the home is yours.

Conditional Offer to Purchase: means that you have placed one or more conditions on the purchase, such as “subject to home inspection,” “subject to financing” or “subject to sale of buyer’s existing home.” The home is not sold until all the conditions have been met.

Acceptance of the Offer
Your Offer to Purchase will be presented as soon as possible. The seller may accept the offer, reject it, or submit a counter-offer. The counter-offer may be in reference to the price, the closing date, or any number of variables. The offers can go back and forth until both parties have agreed or one of you ends the negotiations.