Closing is an interesting time. It’s supposed to be full of hope and excitement. Our was full of stress. But (spoiler alert), it all worked out.
What to do before closing
There are a few things you need to do before closing, and they all create a chain reaction.
The Mortgage Agreement:
As I mentioned in my other post, signing your mortgage agreement is a big deal. So we were very scared to sign this document. But eventually we did. About two weeks before closing. I suggest doing it slightly earlier.
Once you sign the document, the bank needs some time to process the documentation and will then release the “mortgage instructions” to your lawyer. Our lawyer wouldn’t start work on our file until the instructions were sent. This process took exactly one week.
At this point you should have insurance. If you don’t, the bank won’t release your funds, so it’s pretty important.
We had a hard time getting insurance thanks to our knob and tube wiring, so our insurance binder also came at the last minute.
Once your lawyer receives the mortgage instructions and insurance binder, they start working on your file. Most of their work involves figuring out how much money needs to change hands and whether there are any issues with the deed. The actual work probably only takes a day or so.
Our lawyers received everything they needed exactly 6 days (or 4 business days) before closing and managed to get everything done (although not without complaining). I’ve heard that they really only need a day or two, although I don’t suggest testing this theory.
Once they complete their work, they will send you an email asking for a very large amount of money. This amount includes all of your closing costs (land transfer tax, any adjustments to the property tax, your lawyer’s fees and your remaining downpayment). You bring the cheque when you go in to sign all the paperwork, which is usually the day before closing.
Final House Inspection
You should make sure that your purchase agreement includes at least 2 visits. The first is to get a chance to really see your house (you don’t spend a lot of time there during the purchase time, unfortunately) and the second is to confirm that everything is in good condition.
Make sure that the house is generally debris-free (although expect some garbage and random crap around that you’d rather not have…) and that everything is in working order. The previous owner refused a weekend visit for us, so we actually had to have our final visit the night before closing. We weren’t happy about this, but the good thing was that she had moved out and we got to see exactly what we were getting. To our surprise, the house had been professionally cleaned (although still not up to my standards) and it was mostly empty. Given what we went through with her, we were pleasantly surprised.
Then you actually “close.”
We went to see our lawyer the day before closing to sign all the paperwork. There’s a lot of it, so bring your best signing hand.
Then we got a fun little surprised. It turned out that the previous owner decided to take out a mortgage on our house 2 days earlier, known as a bridge loan. Bridge loans are temporary loans that bridge the gap between the sale of two houses. Normally this isn’t a problem, but the bridge loan was not with one of the big banks (we kept joking that it was with Harold the Jewellery Buyer or worse…)
And because it was with some sketchy mortgage lender, our lawyer refused to release our money. Except that the lender also wouldn’t release the funds until we did. A bit of a chicken and egg issue here…
The solution was to have the lender’s lawyer physically come to our lawyer’s office and essentially both release the funds at the same time.
Our house closed at 4:50pm on the day of closing. Not without a lot of stress, but it closed. I got the keys and headed straight to the house. It was finally ours! We celebrated with class: Champagne and take-out pizza.
We ate Parkdale’s finest pizza…
And drank France’s finest Champagne…
Out of classy Ikea glasses…
All in all, not a bad day at all!