So – you have gone through the tedious and sometimes stressful process of finding your ideal home, have come to terms with the seller on the price and have the necessary mortgage financing lined up, but you are still not quite finished yet. There is a saying among experts in the real estate business: the deal has not closed until it has been funded. What this means is that the final closing paperwork must be completed before the property officially changes hands.
For most first time homebuyers, the closing process may be difficult to understand and might leave you unsure of what to expect. Essentially, on closing day all parties involved in the transaction will sign the official documents that are necessary to close the deal out. These documents will include any forms required by provincial and federal law, as well as any documentation required by the mortgage lender financing the transaction. This will be the last opportunity for either party to request adjustments or changes to the terms.
Signing the Legal Documents
The documents signed by you on this day will generally fall into two separate categories: the agreement between you and the lender and the terms and conditions that you and the seller have agreed upon. There will be a considerable amount of documentation containing a lot of information, but it is important to read over all of the documents and ask questions about anything you don't understand – and be sure to lean heavily on your real estate agent at this point as they've been through this before. Remember: you will be held legally liable to the terms and conditions of every document you sign.
Paying Closing Costs
All of the financial agreements will be settled at the closing table as well. This means that if you agree to pay closing costs, you will have to provide a cheque. There are times in which the seller will agree to cover the cost of closing. In some instances the seller will include the closing cost in the total price of the home. While this means that the seller will be the one cutting the cheque on closing day, you are actually paying the closing costs because they are included in the total amount financed.
Present at Closing
Closings are normally conducted by a real estate agent or your attorney, or both. Your real estate agent will ensure that you have an idea of everything that you will need on that day. The closing agent will be the one conducting the closing settlement meeting, and there are a number of ways that this can take place. The ideal situation is to have all parties involved present at one time to ensure that any last minute issues can be resolved on the spot. This is not always possible, meaning that there will be times when the parties involved will sign at different times. Although there is a great deal of detail involved, taking the time to prepare should ensure that things will go as smoothly as possible.
Posted by Rick Clarke on