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Final Closing

You’ve gotten the keys, moved into your new condo, and have been living it up during the Interim Occupancy phase. Now, it’s time to get ready for the final act in your journey to home ownership: Final Closing. This stage marks the moment when you officially transition from being an occupant to becoming the legal owner of your condo. It’s when the title is transferred to your name, and you go from paying temporary occupancy fees to starting your mortgage payments.

It’s the final step where all the official papers get signed, money gets settled, and you legally become the condo owner, making your investment secure.

The Interim Occupancy Phase: Your Temporary Status

In the last part, we talked about the interim occupancy phase which serves as a transitional period where you can live in the condo, but you’re technically not the owner yet. During this time, you’re labeled an ‘occupant,’ and the payments you make to the builder cover expenses like maintenance, vacant land taxes, and partial payments on the purchase price. It’s only at the final closing that you pay off the remaining balance and officially become the condo owner.

Financial Planning for a Smooth Final Closing

Make sure you have adequate savings to cover these costs or have arranged for a sufficient mortgage amount. You’ll have to cover various costs, such as land transfer taxes, legal fees, and any adjustments that may come up. 

 

The silver lining here is that your Realtor’s commission is typically taken care of by the builder. This can be a significant relief, as commission fees can run into the thousands of dollars, depending on the property’s selling price. By having this cost covered, you can allocate your funds toward other necessary expenses, making the financial aspect of Final Closing a bit more manageable. 

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Other Important Things To Remember

Final Walkthrough and Pre-Delivery Inspection (PDI)

During the Final Walkthrough, you’ll tour the condo unit to ensure that everything is as per the specifications and upgrades agreed upon. You’ll want to look for any aesthetic or functional defects, like chipped paint, scratched flooring, or poorly installed fixtures. Bring along a checklist to make sure you don’t miss anything, from examining the plumbing to testing electrical outlets.

The Pre-Delivery Inspection, or PDI, usually happens a few days to a week before the Final Closing. This is a more formal process, typically guided by a representative from the developer’s team. You’ll go through a detailed checklist, identifying any items that need attention or correction. This could include issues with the cabinetry, doors, windows, or even major appliances.

What makes the PDI essential is that it’s your chance to create an official record of the state of your condo before you take ownership. This record can be invaluable if you later discover issues that should have been addressed by the builder.

Closing Day Checklist

Bring all necessary identification and any other documents needed. Here’s a list to make things easier for you:

  • Driver’s license and passport 
  • Copy of the Purchase Agreement 
  • Mortgage and any other paperwork 
  • Certified check or bank draft to cover final closing costs 
  • Final utility readings 
  • Home insurance that clearly states the start date 
  • Contact information of unit owners, your lawyer, real estate agent, mortgage broker, and anyone else that needs to be reached out
  • Key and access cards that you’ll collect from the lawyer’s office

Capped Development Charges: Your Safety Net

Common mistakes to avoid 

Here are some common mistakes that you should be cautious to avoid:

  • Overlooking the Fine Print: Legal documents can be overwhelming, but not reading them closely can be a costly mistake. Make sure you understand every clause in your Purchase Agreement and other legal paperwork.
  • Insufficient Funds: Many people underestimate the closing costs, which can include land transfer taxes, legal fees, and possible adjustments. Always have a little extra set aside to avoid last-minute financial hiccups.
  • Skipping Final Walkthrough and PDI: As tempting as it may be to speed up the process, skipping the final walkthrough and Pre-Delivery Inspection can mean inheriting problems that become costly to fix later.
  • Ignoring Home Insurance: Failing to have home insurance in place by the closing date can actually delay the entire process, as most lenders require proof of insurance before releasing mortgage funds.
  • Not Confirming Payment Methods: Always double-check the acceptable payment methods for closing costs. Whether it’s a bank draft or wire transfer, knowing this in advance can save you from stressful last-minute scrambles.
  • Forgetting Utility Transfers: Overlooking the transfer of utilities like electricity, gas, and water into your name can lead to disruptions in service or extra charges.
  • Assuming Realtor’s Commission: While it’s common for the builder to cover the Realtor’s commission, never assume this is the case without written confirmation.
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And there you have it—that brings you to the end of our pre-construction buying guide. For any specific questions you may have, don’t hesitate to reach out to Kelechi Amadi at That Pre-Construction Guy. 

We specialize in investor-friendly pre-construction projects in Canada priced under $1 million. Even better, we offer exclusive first access to floor plans every single week. By signing up today, you’ll receive details about exciting new projects before anyone else does. Thank you for reading, and here’s to making your dream of homeownership a reality.