Closing Day, also known as Completion Day in BC, is the day a property officially changes hands. The Buyer completes the down payment, final closing costs are paid, and Title is registered in the new owner’s name. The process is managed by the lawyers on both sides, assisted by REALTORS® and mortgage brokers who provide the requisite documents and mortgage funds.

What happens on Closing Day?

1. The Buyer reviews and signs mortgage documents and other administrative paperwork

2. The lender provides the Buyer with the remaining down payment funds and the Buyer gives their lawyer a bank draft for this amount

3. After confirming sufficient funds have been provided to complete the purchase, the Buyer’s lawyer registers the sale with the Land Title Office - the Buyer is now the official owner of the property

4. The Seller receives the net proceeds of the sale after their mortgage balance and closing costs are paid

In practice, the Buyer’s lawyer will usually ask the Buyer to complete the paperwork and provide the funds a few days before closing. This makes the process easier, especially if any unforeseen issues intrude, and helps ensure the sale can actually be finalized on Completion Day.

Getting Ready for Closing Day

Closing Costs

On Closing Day your lawyer will provide you with a Statement of Adjustments that spells out the total costs required to finalize the purchase - the down payment plus the other closing costs. These closing costs include property transfer tax, legal fees, and property tax adjustments. You need to have a clear idea of the amount you’ll need to provide, so be sure to discuss this with your REALTOR®, lawyer, and mortgage broker well in advance

Make sure you’ve got the dough

If you’re using funds from your RRSP to complete the purchase, be sure to inform your bank at least a month before Completion Day to make sure the funds are accessible. Likewise, if you’re relying on funds wired from outside the country or a cash gift from a family member you’ll want to discuss this with your mortgage broker well in advance: your lender might require these funds to sit in your account for a given period. You should also ask your mortgage broker to help you with a rough estimate of your closing costs so you know how much you’ll have left over for the down payment.

Your Visit With the Lawyer

It’s standard practice to meet with your lawyer one to four days before Completion Day in order to sign the paperwork and provide the bank draft. Most lawyers work 9-5, so be sure to book time off work to get everything done - don’t try to fit it all in on your lunch hour. Confirm the visit well in advance to ensure the lawyer can fit you in, and don’t forget two pieces of government issued ID, which the lawyer will need to officially identify you. Oh, and the money! Don’t forget the money.

Arrange the Appraisal 

If your lender requires an appraisal make sure your mortgage broker has arranged this well before the Completion Date. It’s best to have the appraisal done during the conditional period, before the deal goes firm - this way you’ll know whether the bank agrees that the home is worth what you’ve offered to pay for it. If the appraisal is low you’ll want to know long before Completion Day.

Get Your Insurance 

You’ll usually need property insurance in place in order to receive mortgage financing. Your insurance provider will have a lot of questions about the electrical system, the flooring, age of the roof, and other details about the property, information you can learn from the sellers, the home inspection report, and the MLS feature sheet. If you’re buying a strata property you’ll also need the details of the strata insurance policy as this will affect your own insurance coverage. All of this takes time, so don’t dawdle.

After Completion: Possession

Moving In

Although the Buyer will sometimes get the keys on Closing Day, especially if the property is vacant, possession is generally one to three days after closing. Refer back to the Contract of Purchase and Sale for the exact date and time of possession as you’ll need this information to coordinate with your movers.

If you’re moving into a strata building you’ll probably need to give at least two weeks notice to the building and arrange to get an elevator key. Many stratas limit the days of the week and hours for moving in, so make sure you work this into your plans.

If possible, you might want to move in a few days after Possession Day so you’ll have time to clean, paint and set up your new home. Get organized, make a to-do list, don’t freak out.

Line Up Your Dates 

If you’re selling your home and buying a new one at the same time, you’ll want to make sure you line up the Completion Dates for both transactions. It’s often preferable to take possession of your new home first, so that your move isn’t rushed and you can set up your new home before you’re booted out of your old one. Assuming you have firm deals on both sides your bank will probably be happy to provide a bridge loan so you can complete the purchase before you get the funds from the sale - not just because your bank loves you but because the interest rate on a bridge loan can be quite high.

If you have to move out of your current home before sale completes on the new one you’ll need a place to stay and a place to store your stuff. So maybe call your Mom? I’m sorry, you can’t stay here, we’ve already got a bunch of kids.

Conclusion

Real estate seems complicated but that’s only because…well, actually, it’s pretty complicated. But it’s doable! Just build your team - REALTOR®, mortgage broker, lawyer - and let them walk you through it.

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