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The Legal Process: 8 Steps to Closing the Purchase of Your New Home


So working with your Realtor you have found your new home and with the assistance of your mortgage professional you have arranged for a mortgage. What’s next? It’s time to hire a lawyer or notary public to help with the legal process to closing the purchase of the home.

Here are the 8 steps:

Step 1 – Retain the services of a lawyer or notary. Ask your other professional advisors for a referral or family and friends that have gone through the process. Make sure you are hiring someone with experience in real estate closings. Most closings go smoothly but if something unexpected happens you want to make sure your lawyer or notary public has the necessary expertise. You should contact your lawyer or notary as early as possible in the process.

Step 2 – Your lawyer or notary will need to gather information from you, including how you wish to hold title to the property. If you are buying with your spouse or partner most couples hold title as “joint tenants” which means that the couple jointly owns 100%. Upon the death of one owner the property automatically passes to the survivor outside of their Will. The other way to hold title to property is as “tenants-in-common” which means each owner owns a fixed percent which could be 50-50, 70-30 or any combination. Upon the death of one owner the owner’s interest passes under their Will.

Step 3 – Your lawyer or notary conducts a title search and obtains tax information and any additional information necessary to prepare the Statement of Adjustments. The Statement of Adjustments is a balance sheet of the transaction showing the total funds required to complete after accounting for the deposit and mortgage proceeds. And there may be adjustments for taxes, strata fees or rental income.

Step 4 – Your lawyer or notary prepares closing documents including title transfer, mortgage, property transfer tax forms and Statement of Adjustments. Your lawyer or notary will forward the seller’s closing documents to the seller’s lawyer or notary for execution.

Step 5 – 1 to 3 days before closing is when you usually meet with your lawyer or notary to sign documents and deliver the balance of the down payment or equity.

Step 6 – Your lawyer or notary registers the transfer and mortgage documents, arranges for the seller’s lawyer or notary to pick up funds and notifies you that the purchase has completed.

Step 7 – You receive the keys for your new home. Normally you receive the house keys directly from your realtor on the Possession Date as set out in the Contract of Purchase and Sale.

Step 8 – Move in and enjoy your new home – congratulations!

And that’s how it is done.

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