If you have ever purchased a property before, you will likely know that there are many moving pieces that come together in the last few weeks prior to your completion date. This article will provide you, as a purchaser, with some practical tips to help ensure that this process goes as smoothly as it can.
As lawyers practicing in real estate, we see the last minute stresses associated with the completion and, as much as possible, we try to alleviate these stresses by providing advance communication about the process and by helping to plan against potential roadblocks. The following is a summary of some of the tips we think will be helpful to you:
- Mortgage Application Process: We recommend promptly providing your mortgage broker, banker or mortgage specialist with all necessary information so they can push through the approval process and get mortgage instructions delivered to the lawyer’s office as early as possible. This means providing the preliminary information they require (tax returns, contract documents, proof of down payment) and any required follow up items. As well, we recommend carefully reviewing the approval or commitment provided by the lender to ensure you are aware of any conditions that must be met prior to closing. There will often be conditions imposed on the lawyer acting on your behalf and your early awareness of those can help ensure they are met in a timeline manner.
- Arrange Home Insurance: Frequently, when we review contracts for clients, we find provisions related to the purchaser securing appropriate insurance on the property. We encourage our clients to do this as early as possible as completions are often tied to the requirement that appropriate insurance be in place. As the lawyer for the purchaser, we will need to obtain an insurance binder or other adequate evidence of home insurance prior to closing to satisfy the lender’s requirement and be permitted to use mortgage funds. Following up with your insurance provider early in the process to ensure all steps have been taken on your side (i.e. approving a policy, signing documents and paying premiums) can help avoid last minute insurance issues. Further, ensuring the home insurance is effective when required (i.e. 12:01am on the closing date, and not on possession) is important.
- Anticipate Signing Requirements: The closing process usually requires the purchaser to sign legal closing documents within the last week leading up to closing. Ensure your schedule and plans will permit you to be available to sign documents. If you will not physically be able to attend and sign with your lawyer, speak with them early to set up signing arrangements that are workable for yourself, your lawyer and your lender.
- Provision of Closing Funds: In most cases, you will need to provide the balance of your closing funds to the lawyer in a form acceptable to them (this will include the remainder of your down payment, property transfer tax, if applicable, and legal fees). At Touchstone Law, our preference is to receive closings funds in the form of a bank draft, direct transfer, or, where necessary, a wire transfer.
To provide you instructions on the funds required for closing, your lawyer will first need to receive the mortgage instructions. In some cases, mortgages instructions are not provided to your lawyer’s office until shortly before closing. While this may create some unpredictability, being prepared in advance can mitigate this stressor. Anticipate the requirements to provide funds and ensure you have a plan to do so. If you have any doubt or questions, get clarification early.
- Identification: In our practice, client identification is an important procedure. In advance of closing, there are several pieces to client identification that must be completed. These include both our professional obligation to ensure we have sufficiently verified the identification of our clients as required by the Law Society of British Columbia, as well as satisfying the client’s lender. Many banks have very specific client identification requirements that the lawyer acting for yourself as the purchaser and your bank as the lender must meet. In most cases, ensuring you have two valid pieces of government issued identification (Driver’s License, Services Card, Passport) showing your full legal name will suffice. If you do not have those for some reason, reach out to your lawyer early to make appropriate arrangements.
- Communicate: In most cases, last minute issues can be avoided with good communication between your lawyer, mortgage professional, and yourself. We often request approval from our clients to communicate openly with those parties as we find that helps the process move ahead more smoothly and stress free. If you have questions about the process or requirements, we encourage you to ask your lawyer or mortgage professional so you can get answers early and be prepared.
If you would like more information on engaging our firm to assist on a real estate transaction, please do not hesitate to contact one of the lawyers practicing in the area of real estate law at 250-448-2637 or firstname.lastname@example.org
Author: Una KuzioThis information is general in nature only. You should consult a lawyer before acting on any of this information. This information should not be considered as legal advice. To learn more about your legal needs, please contact our office at (250)448-2637 or any of our lawyers practicing in the area of real estate law at the following: Una Kuzio: email@example.com Jane Otterstrom: firstname.lastname@example.org