The home buying process can be intimidating and stressful. This is particularly true for first time buyers. Here are the top seven questions that you may have about the closing process.
1. What is Land Transfer Tax? Land Transfer Tax is a provincial tax that is charged when you purchase a home. The tax is based on the value of the home, so the higher the value of the home, the more tax you will pay. First time buyers may be exempt from Land Transfer Tax. Check with your lawyer.
2. How are property taxes dealt with on closing? Your lawyer will make an adjustment for realty taxes. If you are buying a home and the vendor has not paid the taxes, there will be an adjustment on closing reimbursing you for the unpaid taxes. The opposite applies where the vendor has overpaid the taxes. In the end, you will pay exactly what you owe.
3. Should I obtain a survey or title insurance? This is a complex question and you should consult with your lawyer. There are many situations where a survey should be obtained, particularly where future renovations or additions are contemplated. Title insurance provides excellent protection against a number of possible problems, including fraud—I recommend it on every transaction.
4. Is a final inspection necessary? It is very wise to conduct a final inspection of the home just prior to closing. That way, any possible defects can be identified, reported to your lawyer and hopefully resolved prior to closing. Failure to do so may result in you having to pursue the vendor after closing. This may prove to be difficult.
5. When will I get the keys? You will get the keys when the transaction closes. Many factors make it impossible for your agent or lawyer to tell you at exactly what time you will get the key. For this reason, do not book your movers until later in the day.
6. What needs to be done about utilities? It will be your obligation to contact the utility companies and set up new accounts.
7. What happens if something does not work after closing or if the vendor failed to pay a final bill? After closing, it is very difficult to get these matters resolved. This is frustrating for purchasers. You may, at that point, want to speak to your lawyer for assistance.
There is an incredible lack of homes for sale at the moment. If you are considering selling, do it now. You’ll be pleasantly surprised.
As always, if you have any questions, please don’t hesitate to ask!