Things Both Buyer and Seller Need to Know About Home Closings
Closing day. The really big day for both buyer and seller. It’s usually the culmination of months of anticipation, so it’s understandable if both parties are more than a little excited/nervous/relived and are a little scattered. And while both sides will usually have a little team assembled to help them actually finally get the deal done it’s important that both buyer and seller are both well prepared. Here are our top tips for both sides.
Closing Checklist for Home Sellers
Make Sure All the Papers are in Order
Your lawyer will be expected to provide all deeds, mortgage, survey and current property tax bills to the new owners at closing. To speed the process – and avoid a closing delay – gather them well ahead of time, make copies and then hand them off to your legal team ahead of the big day. You should also provide a set of keys to be exchanged at the closing in advance as well.
Don’t Cancel Your Insurance Yet
Do not cancel your homeowner’s insurance until the property has officially closed and you are no longer responsible for it under law. And if you will be moving out ahead of the closing make sure that you call your insurer to inform them that the home will be vacant, to ensure that you are still covered should something go wrong while it is.
Tie Things Up Properly
If at all possible, have all utility meters read on the day of closing. That way you will only be responsible for your share, and not end up accidentally paying for the new owner’s usage. You should also arrange with your cable and telephone provider for your service can be disconnected on the closing day for the same reason. And if you, like many, pay any of your household utility bills via standing order don’t forget to cancel those in plenty of time too.
Closing Checklist for Buyers
Do Insist on a Pre-Closing Walk Through
You are entitled to request a final walk through of the home prior to the closing and it is not something that you should skip, however ‘pressed for time’ you are. The point of the trip is to ensure that the home is in the condition you expect it to be. And if you do see something wrong, say something. Yes, it may delay the closing a little but it’s your last chance.
Arrange Your Fire Insurance in Advance
Fire insurance must be arranged for the full replacement cost of the home. If it is a condominium, you need a policy to protect your contents and liability. Do not leave this to the last minute or you could a)be left without any coverage and b) it may delay the closing itself if you are taking out a mortgage as the bank may very well object.
Be Prepared for Extra Costs
If you are taking out a mortgage for less than 20 percent down, the bank will deduct certain costs, such as mortgage insurance, appraisal fees and HST. Find out early what all these deductions will be, as you will have to come up with any difference needed to close your deal. Make sure you have provided the lender with all required proof of income, or down payment well in advance so that it does not delay the money.
Stay in Touch with the Seller
The move out process really does need to be coordinated. Usually it is expected that the seller vacate the property either by the time of the closing or very shortly after (as in hours, rather than days.) Communicate with the seller to ensure that everyone is on the same page about move out times and that both parties are happy with arrangement.