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Tips for a First-Time Home Buyer – Part 3

You’ve hired a real estate lawyer, signed on the dotted line (See Tip #1) and have all the funds you’ll need to close the deal. The only thing left is to wait for moving day, right? Not quite.

Once the Agreement of Purchase and Sale is completed and all conditions (if any) have been waived, you will need to meet with your real estate lawyer at least one more time before Closing Day (the day you get your keys and the deal is officially done). Assuming you have a mortgage, the bank will send your lawyer instructions to prepare the necessary mortgage documents for you to sign. The sooner you’re able to meet with your bank and finalize the details of your new mortgage, the sooner they will be able to provide your lawyer with these instructions. The sooner your lawyer receives those instructions, the better. Most banks have deadlines in place for when they must receive those signed documents back from a lawyer in order to provide the mortgage funds required on Closing Day. These timelines can range from a couple of days to over a week. In addition, your lawyer will need the details of your homeowner’s insurance in order to provide this information to the bank. Be sure to arrange your home insurance soon after meeting with the bank so that you can provide this information to your lawyer when requested. If your lawyer only receives information respecting your mortgage from the bank a couple of days before your Closing Day, and/or you don’t already have your home insurance arranged, it could result in a delay in the bank funding your mortgage and consequently, a delay in the closing of your purchase transaction. Arranging your mortgage and home insurance early will help avoid any possible funding delays.

Once you’ve met with your lawyer to sign the mortgage documents and a few other legal documents BEFORE closing, then you can sit back and wait. On Closing Day, your bank will send the mortgage money to your lawyer (who will already have the down payment, provided by you at an earlier date) who will, in turn, send all the funds to the Seller’s lawyer. The Seller’s lawyer will send the keys for the home to your lawyer and when your lawyer has the keys in hand, the deal can be completed. There will be a couple phone calls back and forth between the two law firms, a few clicks of the mouse releasing and registering the transfer of the ownership of the property, and then your lawyer will make one final phone call to you – Congratulations! You’re a home owner!

There is no guarantee how long this Closing Day process will take; technically, the deadline for closing is 5:00pm (the electronic system does not allow for registrations after 5:00pm) and for the most part, the process is completed earlier than that, but again, there are no guarantees. Delays at the bank, at either law firm or other factors can push a closing until the very end of the day, or worst case scenario, to the next business day or later. For that reason, we strongly recommend that you don’t plan your actual move into the home for Closing Day. You are not permitted to enter the home until the entire process is complete, and there’s nothing worse than renting a moving van and/or hiring movers for the day and being unable to unload or move in.

No matter when you’ve planned your actual move into the home, you should absolutely visit your new home on Closing Day, once the deal is done. Check to ensure the previous owners didn’t leave any belongings behind or garbage that can’t go out to the curb on pick-up day, and make sure there is no damage to the home you weren’t previously aware of. If anything isn’t as it should be, let your lawyer know! We also recommend changing the locks as soon as possible; you never know who might still have a key (cleaning ladies, dog walkers, mothers-in-law, etc.).

Most importantly, celebrate your new purchase and enjoy your new home!

So, tip #3 – if you have one, arrange your mortgage as soon as possible; no matter what, arrange your home insurance as soon as possible; and more importantly, at least for your own sanity, don’t schedule your moving day on Closing Day.

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