Whether you’re buying a home or condo, your closing day is a big milestone in the buying process. It’s the last step in taking ownership and typically on this day you handle the paperwork and pay taxes, fees and other closing costs. The home closing date is usually predetermined based on the builders’ delivery schedule. It’s also the day when you get your keys. A lot of things have to happen on the day you close, but don’t worry; our team is here for you every step of the way. Below we’ve outlined some of the key information that you will want to know when you near the closing of your home. We have also created a handy checklist that you can download to help you through the closing process.
Before you can close your home, you’ll need to do several important things, including:
- Engage a real estate lawyer
- Look into home insurance
- Coordinate your utilities (gas, electrical, water, etc.)
- Pack your belongings and hire movers
- Book your elevator (for condo owners)
When it comes to home insurance, movers and hiring a lawyer, it’s helpful to get a few quotes and/or recommendations from friends. As part of your Homeowner Guide we will provide you with local information about utility companies and phone/cable/Internet service-providers specific to your new community. Empire will host a Meet & Greet approximately 90 days before your closing to explain what you can expect and to provide a venue for questions and discussion. This is also a great opportunity to meet some of your new neighbours and the rest of our Empire team.
To close your home, you’ll be working with your lawyer to sign papers, manage finances, liaise with your developer and collect your keys. Closing costs are the fees, taxes and administrative expenses you will have to pay to take ownership of your new home. These typically range anywhere from 1% to 10% of the purchase price. Closing costs are not covered by your deposit cheque or installments that you may have made, so be sure to budget appropriately ahead of time.
How Does My Lawyer Help?
While we recommend you have a lawyer review your Agreement of Purchase and Sale, it is necessary to engage the services of a real estate lawyer to close a home. Your real estate lawyer prepares the paperwork, draws up a statement of adjustments, liaises with the bank and developer, registers the home and more. By the time you’re ready to close your home, your real estate lawyer will have walked you through your closing costs so you should know exactly what to expect. It’s not unusual to pay your lawyer on your closing day and/or to anticipate and include legal fees as part of those closing costs.
Ontario’s Land Transfer Tax applies to all real estate property or land, including new houses and condos, and ranges from 0.5% to 2%, depending on the purchase price. First-time homebuyers may be eligible for a refund of all or part of the land transfer tax. The municipality, such as the City of Toronto, may charge you an additional transfer tax and/or property taxes. The HST also applies to newly constructed homes, but buyers of new homes may receive a rebate of up to $25,000 of the provincial portion (8%) of the HST.
The Canadian Mortgage & Housing Corporation (CMHC) helps Canadians meet their housing needs in a variety of ways, including providing mortgage loan insurance that helps homebuyers buy a home sooner with a minimum down payment starting at 5%. If you have secured CMHC loan insurance, the cost of that insurance is financed through your mortgage but you will have to pay HST on that insurance as a closing cost.
In Ontario, Tarion exists to protect the interests of all new homebuyers. Amongst other things, Tarion administers warranty protection for your new home. As a new homebuyer, you will be obligated to enroll your home with Tarion. Tarion Enrolment fees vary depending on the purchase price of the home. You can calculate your Tarion fees here.
What Else Do I Need to Know?
The process and costs of closing vary by community and differ significantly for home and condo buyers. Condo buyers, for example, join a condo corporation which manages the costs and maintenance of common areas in their building. Through interim occupancy, condo owners can also occupy their homes before they receive their title or have their building registered. Be sure to ask your real estate lawyer or Sales Representative for assistance throughout this process.
We have also created a handy checklist that you can download to help you through the closing process.
Still have more questions? Visit our FAQ.