Congratulations – your offer has been accepted! You're one step closer to becoming a homeowner in Victoria’s beautiful real estate market. But what happens next? The journey from offer acceptance to holding the keys to your new home is an exciting yet detailed process. Whether you’re a first-time homebuyer or a seasoned pro, understanding the closing process can help you navigate the final stages of your home purchase smoothly.In this blog, we’ll break down the essential steps of the closing process in Greater Victoria, from the moment your offer is accepted until you officially become a homeowner.
1. The Offer Is Accepted: What Happens Next?
Once your offer is accepted, it’s important to understand that the deal is still contingent on several factors, including inspections, financing, and legal procedures. In Greater Victoria’s competitive market, the next steps are critical to ensuring the deal goes through smoothly.Key Actions After Offer Acceptance:
- Deposit: After your offer is accepted, you’ll need to provide an earnest money deposit (also known as a good faith deposit). This deposit is usually 1-5% of the purchase price and is held in trust by the seller’s real estate brokerage or a lawyer until closing. It shows the seller that you are serious about purchasing the property.
- Confirm Financing: Now is the time to ensure your mortgage financing is in place. If you’ve been pre-approved, you’ll need to finalize your mortgage with your lender. They’ll conduct a formal review, including an appraisal of the home’s value, to ensure the loan amount matches the property’s worth.
2. Home Inspection and Other Contingencies
Many offers are contingent on home inspections, which give you a clearer picture of the condition of the property. While Victoria’s market is competitive, it’s still crucial to take this step, especially if you're purchasing an older home in neighborhoods like James Bay or Esquimalt, where wear and tear are more common.Steps During This Phase:
- Home Inspection: You’ll arrange for a certified home inspector to conduct a thorough inspection of the property. The inspector will examine major systems such as the roof, plumbing, electrical systems, foundation, and appliances. If any issues are discovered, you may be able to negotiate repairs or a price reduction with the seller.
- Review the Property Disclosure Statement: Sellers are required to provide a Property Disclosure Statement (PDS), which outlines any known issues with the home. This can be a helpful tool in understanding the property’s condition, but it’s important to remember that it’s only a disclosure of what the seller knows, not necessarily a full inspection report.
- Negotiate Repairs or Adjustments: If the inspection uncovers any significant issues, you can ask the seller to make repairs or provide a credit at closing to cover the costs. In a competitive market like Victoria’s, sellers may be less inclined to make significant repairs, but it’s still worth discussing.
3. Finalizing the Mortgage and Appraisal
Once the inspection is complete and any contingencies are addressed, the next step is to finalize your mortgage.Steps to Finalizing Your Mortgage:
- Appraisal: Your lender will arrange for an appraisal to assess the value of the property. If the home appraises for less than the agreed-upon purchase price, you may need to renegotiate with the seller or come up with the difference out of pocket. In Victoria, where home values can fluctuate depending on the neighborhood (like the premium areas of Oak Bay or Rockland), appraisals can sometimes come in lower than expected.
- Mortgage Approval: Once the appraisal is complete, the lender will finalize your mortgage approval. Be prepared to provide any additional documentation if requested. This is the final step before your lender gives you the green light to proceed to closing.
4. Hire a Lawyer or Notary for Closing
In British Columbia, a lawyer or notary is responsible for the legal aspects of the closing process, including the transfer of ownership and the registration of the title. They’ll ensure that everything is in order for you to legally take possession of your new home.What to Expect During This Phase:
- Title Search: Your lawyer or notary will perform a title search to ensure that the property is free from any legal encumbrances, such as liens or unpaid debts. This step is crucial in ensuring that the property can be transferred to you without any legal issues.
- Closing Statement: The lawyer or notary will prepare a closing statement that outlines all the costs associated with the sale, including the purchase price, property transfer taxes, legal fees, and any other outstanding fees or adjustments (like utilities or property taxes). They’ll also calculate your final down payment amount and inform you of any adjustments you need to make.
5. Closing Day: The Final Steps
The big day has arrived! On closing day, everything will come together. Here’s what you can expect:What Happens on Closing Day:
- Transfer of Funds: On closing day, the funds from your lender (or your own) will be transferred to the seller’s lawyer or notary. Your down payment and closing costs will also be finalized.
- Final Review: Before signing any documents, you’ll have a final review of everything. Your lawyer or notary will go over the closing statement, the transfer documents, and any other relevant paperwork. This is your opportunity to ask questions and make sure everything is correct.
- Sign the Documents: Once everything is in order, you’ll sign the necessary paperwork to officially transfer ownership of the property. Your lawyer or notary will then register the transfer of title with the Land Title and Survey Authority of BC.
- Get the Keys: Once the funds are transferred and the transaction is complete, the seller’s agent will release the keys to you! Congratulations, you’re officially a homeowner in Greater Victoria!
6. After Closing: Settling Into Your New Home
Now that you have the keys, it’s time to move in and start enjoying your new home. But before you settle in fully, here are a few things to keep in mind:- Change the Locks: For safety and peace of mind, it’s always a good idea to change the locks or rekey them after you take possession.
- Settle Utility Accounts: Make sure utilities like hydro, water, gas, and internet are set up in your name. In Victoria, services like FortisBC (for gas) and BC Hydro are essential to ensure a smooth transition.
- Home Insurance: Ensure your homeowner’s insurance is active and covers your new property adequately. You’ll need this insurance to protect against unexpected damages.
Conclusion: The Journey to Homeownership in Victoria
The closing process in Victoria’s real estate market can be a complex but exciting journey. From securing financing and conducting inspections to working with a lawyer or notary, each step is essential to ensure that your home purchase goes smoothly.Whether you’re buying in family-friendly neighborhoods like Saanich or looking for something closer to the water in James Bay, understanding the closing process will help you navigate these final steps with confidence. Soon enough, you’ll be settling into your dream home in one of the most beautiful and vibrant cities in Canada.Good luck on your homeownership journey!Disclaimer:
The information provided in this blog is for general informational purposes only. It is not intended to serve as legal, financial, or professional advice. The content should not be relied upon as a substitute for seeking appropriate legal, financial, or real estate guidance. Readers are encouraged to consult with qualified professionals before making any decisions based on the information provided in these posts, including those accessed through hyperlinks.