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So you’ve found the home of your dreams, made an offer and it was accepted. Yay!
Here’s what happens next:
1. You need to provide your deposit
In Toronto, a deposit is usually around 5% of the purchase price and is paid via electronic bank transfer or by bank draft to the listing brokerage. The deposit is held by the brokerage in trust, meaning the brokerage can’t use your deposit to pay their hydro bills.
Your deposit will form part of your downpayment when you close on the home. If, for some reason, you do not close on the property, the Seller may be entitled to keep your deposit. Deposits are a way of showing a Seller that you’re financially sound, that you’ve got some skin in the game and are motivated to take possession.
2. You need to do whatever it is you need to do to waive your conditions
If your offer was conditional on a financing or home inspection condition, you’ll need to get busy and take the necessary steps to waive the conditions within the specified time period.
3. You need to tell your lender
Generally, most lenders require a copy of the MLS listing and your signed Agreement of Purchase and Sale. If your offer was conditional on financing, they’ll use that information to confirm that they will give you a mortgage for that particular home.
4. You’ll likely need an appraisal
Many Toronto lenders will order a house or condo appraisal before they advance the mortgage. An unbiased professional home appraiser will confirm the value of the home using an electronic database and will usually visit the property in person. The bank’s goal is to confirm that you paid market value for the property so that if you default on your mortgage, they aren’t stuck with an $800,000 house that you/they paid $950,000 for. [Related: All About Appraisals]
5. You need to tell your lawyer
Once an offer has been accepted, your real estate lawyer’s job begins. He or she will need a copy of the Agreement of Purchase and Sale and your personal identification. [Related: Your Real Estate Lawyer’s Role]
6. You need to get home insurance
No lender will advance you a mortgage until they receive proof that you’ve insured the property. Get started on obtaining insurance right away – and make sure to get multiple quotes. [Related: All About Home Insurance]
7. You need to plan your re-visits
Most purchase agreements include the right for you to go back and visit the property before you take possession – to measure, show your family, plan your renovations, etc. Your REALTOR will accompany you to these showings. We usually recommend saving one of your visits for the day before closing to ensure that the house or condo is in the same condition it was when you put an offer on it.
These final steps are critical in the home-buying process. You’re almost there – now read this: How to Move and Not Get a Divorce.
