Aug. 13, 2009

You Won Your Dreamhouse: And Now What..?

Even after your bid for the property you decided to buy has been accepted by the seller, there's plenty left to do before you can rightfully move in. In the following article, as an experienced realtor from Toronto I can familiarize you with the most important steps of the process.

After your offer has been accepted, the next thing to do is to meet with your legal adviser and have her/him explain you all your responsibilities following from the contract. Your solicitor should help you to understand all the costs related to the closing procedures, including Land Transfer Tax, disbursements and legal fees.


It is also necessary to verify the absence of any arrears or outstanding charges, such as gas, water or hydro expenses. Your legal adviser does this by sending letters to the municipal or regional utility departments. Another purpose of these letters is to find out if the equipment on the property is rented or owned, and also to inform the utility departments about the scheduled closing date, the new owner's name and the name of the seller's legal adviser. Information about the billing type and whether the billing is metered, all this is also demanded by these letters.


Taxes is another serious topic. You will have to provide a Tax Certificate, which will verify the amount of the current year's taxes and any arrears and outstanding charges for the current year and any previous years.


The Building and Zoning Department will need to get involved as to the particulars of zoning by-laws and restrictions relating to the distance from the street and side and rear lines, type of construction, lot areas and building areas, lot frontage and depth requirements and permitted uses. Another letter is sent by your legal adviser to this department, together with a copy of the survey to reveal all this.


The appropriate division of the Land Registry Office will start a Search of title to the property in order to establish whether or not the seller is the owner of the property and whether or not he has the legal right to convey the property. The search also reveals if the property is not a subject to any encumbrances, encroachments, easements, liens, agreements or mortgages that were not disclosed in the Agreement or Purchase and Sale. Also an execution search is done in the appropriate Sheriff's Office to ensure that there are no executions against the seller or previous owners of the property that would affect your title.


While your legal adviser is completing his initial searches, it is your responsibility to make necessary arrangements for financing. The amount of financing you will qualify for and the amount you will need to finish the transaction should be clear already before you have signed the Agreement of Purchase and Sale. On the day of closing, you might not be aware of all the fees related to mortgage financing. Your legal adviser can advise you of these fees when the financial institution that you chose provides you with a Mortgage Commitment Letter.


A few days before the closing, you will need to come to your legal adviser's office to sign all the necessary documents and to produce a certified cheque to confirm the balance of closing funds.


Your legal adviser will agree to meet with the vendor's legal adviser at a mutually convenient time at the appropriate Land Registry Office where he will sub-search title and complete final execution searches. They will exchange documents, keys and cheques and your legal adviser will make sure all the necessary documents are registered. As soon as this has been completed, you can get the keys and the seller will get the finances.


Now your legal adviser will provide you with a reporting letter that acknowledges your title and explains all the transaction details. Then you are finally free to move in to your new house! Just make sure to check that all items that should be included in the purchase price, as described in the Agreement of Purchase and Sale, are left on the property by the seller. Let your legal adviser know without any delay if you think something is missing.

(picture by azhure)

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