Written by Sean Cooper
Monday, October 22nd, 2018
You've been house hunting for a while. You find your dream home and make an offer. You're not the only one who's interested. After upping your offer price once, the seller accepts your offer. Congrats, you're in the home stretch, but before you can call your place "home, sweet home," there are a few things to consider before the purchase closes.
Buying a home is a major purchase, and obviously, you can't just move in the very next day. The closing process ensures the seller has enough time to move and all the legal Is are dotted and Ts are crossed. The closing process typically takes place within 30 to 90 days from the date the offer is accepted and is based on what's agreed upon in your offer.
Here are three considerations to remember when buying a home.
Most buyers include walk-throughs in their offer. Buyers typically get 1-3 walk-throughs before closing day. Walk-throughs ensure the home is in the same condition as when you purchased it. You'll want to look for any damage to the property. For example, if the home has hardwood floors, make sure they aren't scratched. Furthermore, a walk-through is a good time to confirm any chattels are still there and any fixtures haven't been swapped out. For example, the seller could try to switch an expensive chandelier with a less expensive light fixture. Consider saving at least one walk-through for a week before your move-in date to make sure everything is still in good shape.
When buying a home, don't forget to budget for closing costs. Closing costs can amount to anywhere between 1.5 percent and 4 percent of a home's purchase price. Three common closing costs faced by buyers include: real estate lawyer fees, home inspection fee and land transfer taxes. The timing of the payment of these cash outlays differs. For example, your home inspector will want to be paid at the time the inspection is done, while land transfer tax and lawyer fees are paid closer to your closing day.
Buying a home can be a busy time, so don't forget about home insurance. Most lenders require that you have a policy in place before you move into your new home. Home insurance ensures that your home and possessions are protected in case, say, there's a fire or break-in. Be sure to review your policy, so you're familiar with your coverage.
Your Deposit and Down Payment
There are two major initial cash outlays for homebuyers: the deposit and down payment. The deposit shows the seller that you're serious about buying their home. It's made at the time when your offer is accepted. It's typically paid by certified cheque or bank draft payable to the seller's real estate brokerage in trust.
Your deposit goes toward the next major cash outlay: your down payment. Your down payment is a lump sum payment made on your closing day that goes toward the purchase price of your home (your mortgage covers the rest).
Once you sign your mortgage papers in your lawyer's office, you'll receive a phone call from your lawyer when the deal has gone through. Pick up the keys to your home and celebrate the great feeling of becoming a homeowner.