closing day real estate
March 23, 2022 11:45 am Published by Leave your thoughts

Buying a home is definitely an exciting experience. But it’s not a walk in the park. The whole process of a home sale takes quite a while. Even when you have the money ready, you’ll still need to wait for a few months before all documents are settled.

This is why the closing day is a big deal for homebuyers. But what exactly is a closing day in real estate? It’s when the home sale is finalized and you finally get the title and keys to your new home.

The closing day might only take a day or less, but it’s a culmination of all the time and effort you spent on closing the home sale deal. Here’s a behind-the-scenes look at a typical closing day in Alberta.

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Mortgage Pre-approval

Before you even look around the market for a house you want, it’s important to get a mortgage pre-approval first.

A mortgage pre-approval will tell you how much you can borrow for a home. The lender will assess your source of income, credit score, and any other relevant financial documents.

Once you get pre-approved for a mortgage, you can browse through house listings more freely with a specific price range in mind.

Finalizing the Offer

finalizing the offer

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Once you’ve found a home that you like, ask the help of a real estate agent when placing an offer. They can assist you in coming up with a competitive offer that has the best chances of getting you the home.

Some home sellers accept the offer as it is, but others try to negotiate. Make sure you have your realtor and lawyer with you when you negotiate. They should represent your interests well and ensure that the deal works for both parties.

Finalizing an offer may take several days, depending on how much negotiation is necessary.

Down Payment

Once an offer is finalized, it’s time to make a down payment or deposit for the home.

This is usually handled by an impartial third party to make sure your money is safe even if a home sale deal falls through.

The lawyers and accountants of both parties will discuss all the fees that you need to pay. They will draft up an invoice containing the breakdown and total amount you need to deposit. The deposit is in place to make sure that you’re really interested in buying the home. It also lessens the chance of a buyer pulling back from the deal.

A down payment provides security for both the seller and buyer.

Home Inspection

A home inspection is also important. It’s not required, but it will benefit you a lot. Hire a home inspector to see all the things that still need fixing in the home (if there would be any).

If there are any points of concern, it’s better to raise them to the seller as soon as possible. You could then come up with an agreement on how you’d settle the issues even before the home sale is finalized.

A home inspection only takes a day. It could save you a lot on repairs that might cause trouble if they’re not addressed immediately.

Contract Review and Signing

contract signing

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Once you’re happy with the condition of the house, it’s time to go over the contract with your team.

Set a meeting with your lawyer, realtor, accountant, and other people involved in the homebuying process. Review all the terms and conditions stated in the contract. Make sure you agree with every single clause to avoid conflicts in the future.

If there are any revisions you’d like to make, have your lawyer discuss them with the other party. It’s important that both parties come to a clear agreement on the contract terms before signing.

Once everything is settled, you can set a day to sign the contract. Both parties and their representatives should be present during this process. The sooner you sign the contract, the faster you can close the deal.

Applying for a Mortgage

After signing the contract, you should start applying for a mortgage. This whole process could take a while, so it’s better to do it as soon as possible.

If you have a mortgage broker, ask them about all the documents you’ll need to submit to get your mortgage approved. A mortgage preapproval could make the whole process easier. But the lender still needs to check all documents to make sure you can afford the mortgage.

Home Value Appraisal

This would be a necessary step to having your mortgage application approved. The lender would want to know how much the house is really worth. They will use the home’s appraised value to make sure that your loan is justified.

A home appraisal would be the lender’s way to make sure that the house is worth the amount you agreed to pay for it. If the appraised value is lower than the loan amount, the process might be more complicated.

Make sure the price you offer on a house matches its worth to get your mortgage approved faster.

Closing Day

Finally, once your mortgage gets approved, you can count down the days to close the deal.

It’s better to set the closing day at the start or in the middle of the week. A closing day set on Friday isn’t always the best choice. If unexpected problems arise, you might have to wait until Monday for the lawyer or notary public.

Setting it at the end of the month might also not be the best idea. If there are problems, your lawyer fees and closing costs might carry over to the next month. This increases the fees you’ll need to pay and therefore cost you more.

Buying a Home in Alberta

buying a home in alberta

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Knowing the processes leading up to a closing day will make buying a home less overwhelming.

You might want to check out foreclosed properties as they usually sell for cheaper. And if you’re not quite ready to own a home, you might want to check out rental properties in Alberta’s smaller communities like Airdrie.

Again, here’s an overview of the deal-closing process in Alberta real estate:

  • Mortgage pre-approval. This will let you know your ideal budget for a home.
  • Finalizing the offer. A seller might negotiate with you about the offer you placed. Make sure you both come to an agreement.
  • Down payment. This secures your deposit as a buyer. It also assures the seller that you’re really interested in buying the home.
  • Home inspection. This usually only takes a day. It tells you if there are things that need fixing with the home so that you can discuss them with the seller before the deal closes.
  • Contract review and signing. This allows you to go over the terms and conditions and make sure you agree to all of them. Contract signing requires both parties to be present.
  • Applying for a mortgage. The sooner you do this, the sooner you could get your mortgage application approved. Make sure you submit all the necessary documents.
  • Home value appraisal. This allows the lender to see whether your loan is acceptable based on the appraised value of the home.
  • Closing day. Block off at least half a day in the middle of the week for the closing day. It might take time and you might run into some problems, so allow for enough time to settle them.

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This post was written by Derek Timmons

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