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My Closing: Everything You Need for Closing on a Purchase/Sale of a Home

The purchase or sale of a property is generally a long and stressful exercise that involves a long process and procedural formalities. Several steps occur in the exchange of ownership of a house. 

House closing is the last stage where you sign the papers to finalize the deal. However, before that day comes, there is a long list of things that has to happen first. It might sound daunting, but it’s worth it at the end when you get the keys to your new home or hand them over to the buyer. 

We take an in-depth look at what needs to happen to have a successful closing on a house purchase or sale. 

What Is Closing and When Does it Happen?

When purchasing a home, the process from start to finish can be stressful. Everyone looks forward to the day they can own a place of their own. One of the most important days when buying a property is the closing date on a house when you become the legal owner. 

When the buyer and the seller are busy with contract negotiations, a closing date will be set and listed on the purchase agreement. Once the seller accepts the offer and the buyer deposits “earnest money,” you can expect to wait a while before your real closing date. 

Even though the buyer and seller agree to a specific date, the agent, lender, and title agency will probably suggest a timeline that allows them enough time to execute the deal correctly. It may mean that your closing date is out several weeks or even months after the initial offer was formally accepted. 

Mortgage Pre-approval

A recommended step in buying a house is to get a pre-approved mortgage before you start searching for a home. If you’re a cash buyer, you don’t need this. Loans pertaining to real estate are some of the most significant debts individuals will ever have during their lifetimes. Most sellers expect buyers to have a pre-approval letter. 

Getting pre-approved lets you know how much the bank is willing to lend you. It makes it easier to go house hunting when you have a set budget. Preapproval also gives you more time to respond to possible discrimination. As part of the process of seeking out mortgage pre-approval, you need to find out how much closing costs should be on a home purchase as these aren’t always covered by the loan. 

The fees typically range from 3% to 6% of the purchase price. For example, if you buy a house for $200,000, your closing costs will range from $6,000 to $12,000. These charges depend a lot on the province you live in, loan type, and lender. 

Some standard fees may include the following, depending on the type of property you purchase:

  • Application fees
  • Origination &  underwriting fees
  • Attorney & closing fees
  • Courier charges
  • Credit report costs
  • Escrow deposit
  • Homeowners’ Association Transfer Fee
  • Flood establishment and monitoring
  • FHA Mortgage Insurance Premium
  • Homeowners Insurance
  • Lender’s Title Insurance
  • Lead-Based Paint Inspection (for homes built before 1979)
  • Owner’s title search and insurance
  • Property Appraisal Fee

Requirements for Closing

There are certain documents that you’ll need to be able to close the deal on a property. These differ slightly between cash purchases and ones where the buyer has taken out a loan.

Required documents for all purchases:

  • Identification with a photo
  • Funds for the purchase
  • A divorce order/separation agreement
  • Any revocable living trust
  • Documentary or transfer stamps

Items required for purchases where the buyer has a loan:

  • Proof of insurance such as wind, flood, earthquake insurance, as well as a homeowner’s insurance certificate and paid receipts
  • Post-inspection confirmation
  • Septic and Well letter if needed
  • Judgment or lien release
  • Construction lien waivers
  • Documentary stamps

Buyer and Seller Responsibilities

Whether you’re buying or selling a property, there are specific responsibilities that you need to meet. 

Buyers Responsibility:

  • Deposit collateral into an escrow account. It’s known as “earnest money,” and these funds will be held by a third party and allocated for closing costs.
  • Provide all requested documentation and information to the lender for the underwriting process.
  • Purchase homeowners insurance. Many lenders require proof of coverage to approve the loan.
  • Make arrangements for utilities to be transferred into the new name and make it effective on the purchase closing date.
  • Do a final walkthrough of the property. 

Seller Responsibility:

  • Remove all your possessions from the property unless otherwise specified in the sales contract. Sometimes major appliances are negotiated into a deal.
  • Make any repairs that are required and agreed upon.
  • Clean the house just before the closing date. Try to leave it as clean as you’d like to find it if you were the new owner. 
  • Consider some of the following as a nice gesture for the buyer:
    • Notify creditors, subscription services, and acquaintances of your new address and set up mail forwarding.
    • Gather all the manuals you have for items in the home, such as the HVAC system or other large appliances that you’re leaving behind. You can leave them in the kitchen on one of the counters for the buyer. Include with the pack any spare keys and garage door openers.
    • Shut off the main water valves to prevent any leaks between the time the buyer takes possession and when they move in. 

Closing Process Steps

Below are the recommended steps to follow for a successful and stress-free closing.

  • Choose your real estate attorney.
  • Purchase homeowners insurance.
  • Obtain title insurance after you’ve done a title search.
  • Cover the conditions of the loan.
  • Complete a thorough home inspection.
  • Don’t forget the lender appraisal.
  • Review the closing disclosure.
  • Do a final walkthrough of the property.
  • Prepare to move.
  • Gather your documents.
  • Attend the closure to finalize the sale on the closing date and get your keys.
  • If applicable in your province, file a homestead declaration.

Contingencies to Fulfill before Closing

Typically the real estate purchase agreement requires certain contingencies to be fulfilled before the closing can occur. If a contingency cannot be met for whatever reason, one of the parties, usually the buyer, can back out of the deal.

Some possible contingencies include:

  • Appraisal 
  • Inspection
  • Financing 
  • Buyer’s home sales contingency
  • Kick-out contingency

For example, an appraisal contingency requires the home to be valued for a certain amount, usually the asking price. If the appraiser does not find the value, then the buyer can exit the deal. An inspection contingency is similar in that it requires that the home be inspected and that no material defects are located in the construction.

Closing Problems That Cause Delays

Sometimes things don’t always go smoothly with the closing on a property, and problems can occur that cause delays. A few of the common ones are:

  • Loan problems
  • Appraisal issues
  • Home inspection problems
  • Walkthrough problems
  • Documentation 
  • Neighborhood problems
Difference Between Seller Credit and Seller Concessions Seller concessions are closing costs that sellers agreed to pay. These are also referred to as seller contributions. Seller credit is the monetary amount of closing costs that the seller agreed to pay. At closing, in reference to repairs, buyers can offer the credit’s caveat, and the seller might counter back with a smaller amount or another type of credit. Additionally, it’s standard practice for the purchase price to be negotiated around seller credit.
What to Wear During Closing Unless you’re the realtor or lender, there are no rules as to what you need to wear. Most of the time, the buyer and seller don’t even see each other, so your attire doesn’t matter. If it makes you feel better to dress up, then it’s purely your choice, and you could go for a business casual look. Most realtors expect their clients to wear casual clothes.
Documents To Sign During Closing There are two categories for the signing of documents. The first is the agreement between the buyer and the lender regarding the mortgage’s terms and conditions. The second is the agreement between the buyer and the seller transferring the ownership of the property. Ensure that you read all the documents before signing them, and don’t sign anything with blank lines or spaces.


“Take the closing process seriously so you can transfer to your new home smoothly.”
– Diamond & Diamond

Wrapping Up Closing

The laws differ between provinces as to what exactly has to happen at closing. Ultimately, the deed to the property is transferred to the buyer, any closing costs are paid, and money is transferred and disbursed. The document also needs to be filed with the regional recorder’s office before it’s deemed, official. 

It may seem like a lot of work, but it’s worth the time and effort to get things right instead of rushing and signing a deal you don’t understand. Take the time to enlist the help of professionals at every stage of the process, and do proper research. 

A consultation will help you figure out whether you have all the items required or if you need them. If you need insight and assistance with any of these aspects, contact a Diamond & Diamond professional to help you close with confidence.

My Closing: Everything You Need for Closing on a Purchase/Sale of a Home FAQs – 

What Are Closing Costs?

These are charges due when closing a real estate transaction, over and above the property’s purchase price. Some common ones are taxes, realtor commissions, insurance, record filing, and fees related to the underwriting and origination of a home loan. 

It’s important to know who pays the closing costs on a home sale, and the details must be made clear by law to sellers and buyers. These have to be listed and agreed to before the parties can complete the deal.

How Do Seller Concessions Work?

Seller concessions are closing costs that sellers agreed to pay. There are times when you can ask the seller to pay for individual closing costs. Alternatively, the seller may be liable for a percentage of the total closing fees amount. 

Does the Seller Have to Be at the Closing?

It’s not required for the seller to be present at the same closing as the buyer. There might be several reasons why it’s not viable for both the buyer and seller to be in the same place to sign the closing documents. They don’t even have to sign the papers on the same day. There can be two entirely separate meetings, whether at the transferring attorney’s office or the title company’s premises. 

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