In real estate transactions, the closing day is the summation of a lot of hard work. It’s when you, the proud new owner of a property, take possession from the seller. It is a significant milestone.
To reach that milestone takes the effort and planning of three main parties: you, your mortgage broker and a real estate lawyer. Your realtor may also assist in communication and document transferral.
To help you glide through the process without hiccups, here’s a short (by no means comprehensive) checklist for reference. Tick each item off the list with the help of the above-mentioned parties, and never be afraid to ask one of them for help or consultation.
Hire a Real Estate Lawyer
First thing’s first: find a lawyer near you who is both professional and affordable. (Virtual real estate legal services are a fantastic option here). Among other things, a real estate lawyer will:
- Review the purchase and sale agreement
- Review the title search
- Communicate on your behalf with the title insurance company
- Receive mortgage instructions and prepare all legal mortgage documentation
- And prepare all the legal purchase closing documentation.
In addition to the long (and incomplete) list above, a real estate lawyer is the person in your corner looking out for your legal best interests. They want your papers in on time, filled and filed correctly. They want to ensure that you are protected, educated and prepared. They are truly indispensable.
Resolve Any Contingencies and Conditions
Contingencies, sometimes called conditions, are provisions in a real estate contract that need to be satisfied. If the conditions aren’t met, the contract is nullified. Think of them as your escape hatch if things should go wrong.
A typical contingency is mortgage approval –the transaction will only be completed if your mortgage is approved. Another is an inspection contingency, which gives you, the buyer, the right to inspect the home. If the property doesn’t pass muster, you can negotiate repairs or cancel the contract. For a list of other common contingencies, consult this writeup.
Before closing, make sure to resolve all contingencies and conditions. Your realtor can help with this process.
Get Your Mortgage Approved
A straightforward but nevertheless essential step in closing is mortgage approval. Ensure that your mortgage broker has everything they need for the lender’s satisfaction. Stay on top of communication (especially in busy real estate seasons) and provide items promptly.
Schedule a Pre-Closing Final Inspection
You may choose to do a final inspection, commonly known as the “walk-through.” Typically, the walk-through is slated for 24-hours before closing. In your final inspection, confirm that the previous owner (or tenant) has vacated the property and that the place is left in the condition upon which you agreed.
As a final note, take time before closing to consider moving. If moving into a condo, you will have to arrange with the strata or building management for elevator reservation. You should also consider setting up your cable, phone and utilities in advance, as well as redirecting mail to your new address.
Before closing, you will meet with your real estate lawyer, who will have you sign a veritable mountain of paperwork (don’t worry: they will guide you through everything). Once everything’s squared away, the keys are yours. You are now free to enjoy your brilliant new investment!