Chapter Four: The Offer and Closing Process

Congratulations! You’ve found the perfect home, and now it’s time to navigate the offer and closing process. This chapter will guide you through the essential steps involved in finalizing the purchase of your dream home.

4.1 Making an Offer

When you’re ready to make an offer, work closely with your realtor to develop a strong and compelling offer that aligns with your budget and the property’s value. Consider the following factors:

Offer Price: Determine the offer price based on market comparables, the property’s condition, and your budget. Your realtor can provide guidance to help you make a competitive yet reasonable offer.

Offer Conditions: Include any necessary conditions in your offer, such as a satisfactory home inspection, financing approval, or the sale of your current property.

Deposit: Decide on the deposit amount, which demonstrates your commitment to the purchase. It’s typically a percentage of the offer price and is held in trust until the closing. Closing Date: Specify the desired closing date, keeping in mind a timeline that accommodates your needs and aligns with the seller’s preferences.

Offer Expiry: Set an expiry date and time for the offer to give the seller an appropriate window to respond.

Your realtor will present the offer to the seller’s agent, who will communicate your terms. Be prepared for potential negotiations and counteroffers. Your realtor will guide you through this process, ensuring your best interests are represented.

4.2 Home Inspections

Once the offer is accepted, it’s essential to conduct a home inspection to identify any potential issues or repairs needed. Hire a professional home inspector who will thoroughly assess the property’s condition, including its structure, electrical systems, plumbing, and more. The inspection report will provide valuable insights into the property’s health and help you make informed decisions.

Review the inspection report carefully. If any major issues arise, consult with your realtor to discuss potential remedies, renegotiations, or the possibility of requesting repairs from the seller. Your realtor can guide you on the best course of action based on the inspection findings and your specific circumstances.

4.3 Finalizing the Purchase

Once the offer conditions are satisfied and you’re ready to proceed with the purchase, it’s time to finalize the transaction. The following steps are typically involved:

Secure Financing: If you haven’t done so already, provide all necessary documentation to your lender to secure the mortgage financing. Work closely with your mortgage professional to ensure a smooth process.

Lawyer Review: Retain a real estate lawyer who will review all legal documents, including the purchase agreement, title search, and mortgage documents. The lawyer will ensure everything is in order and protect your interests throughout the closing process.

Title Transfer: Your lawyer will handle the transfer of the property’s title from the seller to you. They will perform a title search to ensure there are no outstanding liens or legal issues affecting the property.

Insurance: Arrange homeowner’s insurance coverage to protect your new investment. Provide the insurance details to your lawyer and lender as required.

Property Walkthrough: Prior to closing, schedule a final walkthrough of the property to ensure it’s in the same condition as when you made the offer and that any agreed-upon repairs have been completed.

Closing Documents: Your lawyer will prepare all necessary closing documents, including the Statement of Adjustments, which outlines the final financial details of the transaction.

Closing Funds: Transfer the necessary funds, including the remaining down payment, closing costs, and legal fees, to your lawyer’s trust account before the closing date.

Completion and Possession: On the closing date, your lawyer will register the transfer of the property’s title, and the funds will be transferred to the seller. Once completed, you will receive the keys to your new home and take possession.

4.4 Closing Costs

Closing costs are additional expenses incurred during the purchase of a property. These costs can vary but typically include the following:

Legal Fees: Your lawyer’s fees for conducting the title search, preparing legal documents, and facilitating the closing process.

Land Transfer Tax: This tax is calculated based on the purchase price and varies by province. Some provinces offer rebates or exemptions for first-time buyers.

Property Tax Adjustments: You may be responsible for reimbursing the seller for property taxes they’ve prepaid beyond the closing date.

Mortgage Insurance: If your down payment is less than 20% of the purchase price, you may need to pay for mortgage insurance.

Home Insurance: Paying for your first year of home insurance coverage is typically required before closing.

Moving Expenses: Budget for costs associated with hiring movers, renting a moving truck, or purchasing packing supplies.

It’s crucial to budget for these additional costs to ensure you have sufficient funds available for a smooth closing process.

In Chapter 5, we’ll explore homeownership and beyond, including tasks after moving in, home maintenance, insurance considerations, and building equity for the future.