What Happens on Closing Day When Buying a House in BC?

On closing day, buyers sign final documents, pay closing costs, and transfer funds. The seller hands over property ownership, and the transaction is recorded with the local government. Once complete, the buyer receives the keys to the property, officially concluding the home-buying process.

As a realtor with over 20 years of experience, I’ve seen it all – from smooth closings to absolute nightmares. This guide will walk you through everything you need to know to prepare for a stress-free closing day in BC.

Key Takeaways:

• Closing day, also knowns as the Completion Day, is when the legal transfer of the property occurs and you officially become the owner
• Proper preparation, like securing financing and insurance, is key to avoid delays
• Expect to sign lots of paperwork and provide the lawyer with closing costs
• Pay attention to included items promised by the seller during walkthroughs
• Schedule carefully to avoid busy times that can cause slowdowns
• Understand all closing costs and post-closing obligations to transition smoothly

What Exactly Happens on Closing Day For a Buyer?

Closing day marks the legal transfer of the property title from seller to buyer in British Columbia. This means signing lots of paperwork, handing over closing costs, and getting the keys to your new home!

Here’s a rundown of what happens:

• The buyer signs final paperwork prepared by the lawyer related to the mortgage, title transfer, and closing costs
• The buyer provides the down payment and closing costs to the lawyer as a certified check or wire transfer
• The lawyer registers the purchase with BC’s Land Title Office to record the buyer as the new legal owner
• The seller receives sale proceeds minus lawyer fees, outstanding mortgage balance, and commission
• Both lawyers ensure proper documentation like insurance and fulfilled contract conditions

Often, the buyer will actually go over documents and provide the closing costs 1-4 days before the closing date. This gives the lawyers time to finalize the title transfer by the official completion day.

How to Prepare for a Smooth Closing Day

Want to avoid headaches on closing day? Proper preparation is key for a stress-free experience.

Here are my top tips as a BC realtor:

Understand All Closing Costs

Beyond just the sale price, additional closing costs like legal fees, property transfer tax, and adjustments can add up. Discuss all costs with your realtor and lawyer to avoid surprises. Make sure you have the down payment and extra funds available.

Finalize Mortgage and Insurance

Secure financing and transfer funds to your lawyer well in advance. Finalize home insurance details too, as the lender will require coverage.

Complete a Final Walkthrough

Do a final property walkthrough right before closing to ensure the seller has left all promised items and repairs are done. Review your inspection report and flag any changes.

Sign and Review Paperwork

Thoroughly go over documents with your lawyer beforehand. Ask questions and raise concerns early to avoid delays. In BC, Canada, real estate closing day requires buyers to provide proof of financing, sign legal documents, pay closing costs, and confirm property insurance.

Sellers transfer ownership by signing a transfer form, and funds are exchanged through lawyers or notaries. The transaction is then registered with the Land Title Office. It’s important to ensure all paperwork is accurate and complete to prevent last-minute issues.

Buyers and sellers should stay in close communication with their legal representatives to address any unexpected complications. If you’re wondering, can a corporation buy a house , the answer is yes—business entities can purchase real estate, but specific legal and tax considerations may apply. If any discrepancies arise, they should be resolved as soon as possible to keep the process on track.

In some cases, a real estate deal falls through due to financing issues, incomplete paperwork, or unresolved legal matters, which can lead to delays or financial losses. Ensuring all conditions are met and deadlines are followed will help both buyers and sellers avoid complications during the closing process.

Pick Dates Carefully

Avoid closing at busy times like month end or Fridays to allow time to fix problems. End of month can increase prepaid interest costs too if delayed.

Understand Post-Closing Obligations

From maintaining insurance to repaying RRSP funds, know your legal obligations after closing. Follow up on all requirements to transition smoothly.

Did you know that over 80% of homebuyers feel unprepared for at least some parts of the closing process, according to a survey by Richard Morrison? As a realtor, I’ve found taking the time to understand what will happen on closing day goes a long way to reducing anxiety.

An Inside Look: My Experience with Closing Day Disasters

In my 20 plus years as a realtor, I’ve seen all kinds of closing day mishaps. Here’s one memorable disaster story:

I was representing a young couple buying their first home. We had done all the preparation – secured financing, transferred down payment funds, completed the final walkthrough – everything seemed ready for their big day.

On closing morning, as I awaited their call that everything went smoothly, my phone lit up with panic. The couple’s down payment wire transfer hadn’t arrived in time due to a typo in the account details!

I rushed to their lawyer’s office to review options. Unfortunately, the sellers were adamant on completing as scheduled and threatened to put the home back on the market.

After tense negotiations, we convinced the sellers to extend closing till the next day when the funds would arrive. Thankfully disaster was averted, but I learned to always confirm receipt of funds well in advance from that stressful experience!

How to Avoid Common Closing Day Issues

Based on my first-hand experiences, here are some tips to avoid headaches on closing day:

• Confirm all funds have transferred – Follow up with your bank and lawyer to guarantee money has arrived days before closing.
• Finish final walkthrough ASAP – Complete a few days before closing to allow time for repairs.
• Read the fine print – Review documents thoroughly and clarify uncertainties with your lawyer.
• Have backup closing dates – Discuss extending the closing date just in case to avoid losing the home.
• Avoid end of month – Closing costs increase if the transaction is delayed past month end.
• Pick ideal dates – Steer clear of Fridays or busy periods like the holidays or summer.
• Start paperwork early – Work with your lawyer to complete as much as possible in advance.

With proper planning and understanding what to expect, your closing day will go off without a hitch! Let me know if you have any other closing day questions. I’m happy to help prepare and counsel my clients every step of the way in the home buying journey.

Post-Closing Obligations to Transition Smoothly

The work doesn’t stop once you get the keys! As a new homeowner, you take on important legal and financial obligations. Here are key tasks after closing day:

• Record the deed – To establish legal ownership, the deed must be registered with the local land records office.
• Maintain insurance – Keep home insurance in place that meets your lender’s requirements. Review it provides adequate coverage.
• Pay Strata Fees – If part of a Strata Corporation, continue paying fees and abide by rules.
• Honor existing leases – If tenants occupy the property, honor the original rental agreements.
• Repay down payment funds – If using RRSP First-Time Home Buyer’s Plan, repay the amount withdrawn over 15 years.
• Change utilities – Contact service providers to transfer electric, gas, water, etc. accounts into your name.
• Update mailing address – Submit change of address to post office and alter contacts for bills, subscriptions, etc.
• Do renovations – If you plan to remodel, ensure proper permits and adhere to Strata guidelines.
• File taxes – Keep records for tax deductions on mortgage interest, property taxes, Strata fees, etc.

Staying on top of your obligations maintains your investment and ensures a smooth transition into homeownership. I’m always happy to guide my buyers through what to expect after closing as well.

Closing on Your Dream Home

Closing day marks an exciting milestone, but the key is understanding the process to avoid hiccups. With proper preparation, knowledge of your costs and commitments, and expert guidance every step of the way, you’ll be equipped to handle closing day with confidence.

If you have any other closing day questions or need a trusted realtor to represent your home purchase, don’t hesitate to get in touch! I’m always happy to help new homebuyers navigate the journey to closing day and beyond.

Q: What happens on closing day when buying a house in British Columbia?

A: On the official closing day, the buyer will provide a bank draft with the closing amount for the purchase price and any closing costs. The funds must be received by the seller prior to closing. The seller will then transfer title of the property to the buyer and they will complete the purchase.

The mortgage broker may also require that any prepaid interest due at closing is paid, as this interest accumulates up until the end of the official closing date. Additionally, depending on any damage between contract and closing, a statement of adjustments may be required. This is an estimate of any additional funds that need to be paid or refunded from either party.

Q: What do I need to know about Closing Day?

A: Before Closing Day, buyers should prepare for closing by speaking with their mortgage loan officer, Realtor, and title insurance company. They should also ensure that all inspections have been completed (e.g., home inspection) and that all documents are signed appropriately.

On Closing Day itself, buyers should ask their real estate agent for details about what will happen during this process as well as what information they may be required to provide (such as a bank draft). Finally, buyers want to ensure that everything goes smoothly so they can officially take possession of their new home.

Q: Can I back out of buying a house before Closing Day?

A: Yes – although it depends on your Purchase Agreement and whether it has contingencies in place. If there are no contingencies, you may not be able to back out without penalty unless both parties agree or if there has been fraud or misrepresentation on behalf of either party. It’s important to speak with your real estate agent and/or lawyer prior to signing anything if you plan on backing out of buying a house before Closing Day.

Q: What do I need to pay on Closing Day?

A: On Closing Day you must pay your mortgage balance and any applicable closing costs such as legal fees or title insurance fees. You may also need to pay additional funds if there are any changes between the time you signed your Purchase Agreement and when you close, such as repairs made by either party prior to taking possession or other expenses incurred throughout the purchasing process.

Q: What happens on Possession Day after Closing?

A: On Possession Day after Closing, which typically occurs several days after Closing Day but can occur sooner depending on what is agreed upon in the Purchase Agreement, sellers must transfer possession of their property from themselves to buyers (including keys). It is also possible for buyers and sellers to negotiate an earlier Possession Date than what was originally stated in the Purchase Agreement prior to signing anything.

Q: Do I need Title Insurance when Buying a House Before Closing?

A: Yes – Title Insurance is necessary when buying a house before closing because it protects both parties against potential issues relating to ownership rights or liens against the property that could arise in future years after its purchase. As such, it’s important for both parties (buyer & seller) have Title Insurance prior to completing their transaction.

Q: How much are typical closing costs when buying a home in BC?

A: Typical closing costs when buying a home in British Columbia include legal fees ($800-$1,200), title insurance ($100-$200), land transfer tax ($1000-$100000+), appraisal fee ($150-$200), home inspection fee ($250-$400) plus GST/HST depending upon applicable province/ municipality regulations.

When do you get keys on closing day?

You receive the keys to your new property on closing day after all documents are signed, the funds are transferred, and the transaction is officially recorded with BC Land Title Office. The time and date of possession can range, but typically you can have possession between  9AM or 12PM usually 1-2 days after completion .

What Are Some of the Hidden Closing Costs When Buying a Home in BC?

When purchasing a home in British Columbia, it is essential to be aware of the breakdown of fees when buying a home in bc . Aside from the obvious costs like the down payment and mortgage, there are hidden closing costs to consider. These could include land transfer tax, legal fees, home inspection charges, property insurance, and more.

Conclusion

Closing day is the most important day in a real estate transaction. In British Columbia, it is when all of the documents for final closing are signed and all of the funds have been received. On this day, the buyer must come prepared with enough money to cover any closing costs and the remaining mortgage balance due at closing, which accumulates throughout the month.

The seller has completed all their paperwork and will transfer ownership of the property to the buyer on closing day. Buyer will also sign documents related to their mortgage loan and other home purchases as well as any increased closing costs that may have occurred before closing.

It’s important for buyers to understand how much money they will need on closing day, so they should ask their seller if there are any additional fees they need to be aware of or if there are any other costs associated with their purchase.  

The seller has already earned from the sale so now it’s time for both parties to move forward with a successful real estate transaction.  

Sources:
https://www.investopedia.com/articles/mortgages-real-estate/10/closing-home-process.asp