Buying a home: what to do after your offer is accepted
You found your dream home, submitted an offer, and it’s been accepted. Congrats! Here’s what you need to do after the sellers accept your offer.
Congratulations! You made a plan to find a new home and followed it through to put in an offer on a house. Now your offer has been accepted. And while you probably feel excited (and perhaps even a bit relieved), the process isn’t quite finished.
Buying a home is a somewhat complicated process, and includes many small steps and things buyers wish they knew before buying their first home. That’s why it’s important to review your responsibilities and things to watch for once an offer is accepted on a house.
Use this step-by-step list to make sure you don’t overlook any of the many tasks needed to complete the home buying process.
What you need to do once your offer is accepted on a house
We’ve previously written about the steps you need to take before submitting an offer to buy your first home, but let’s go over what you need to do after a seller says “yes” to your offer on a house. Here are some of the things you’ll need to do (and to be aware of!) when your offer gets accepted.
Tell your real estate lawyer
If you don’t already have a real estate lawyer, you’ll need one. The lawyer will take care of various legal tasks associated with the purchase. Some of their responsibilities might include:
- Collecting and paying land transfer tax (or arranging any potential rebates)
- Arranging for title insurance and/or completing a title search (expect to pay $400-500 for title insurance)
- Helping first-time buyers understand common mortgage terms and meanings
- Preparing and finalizing mortgage documents based on instructions from your financial institution or mortgage company
- Registering the deed/title and mortgage documents with the appropriate government office
- Handling the transfer of funds for the purchase and sale
- Getting a status or estoppel certificate for condominium purchases
- Sometimes assisting the realtor with transferring keys from seller to purchaser
Legal fees for purchases can vary depending on where you live, but will likely range between $500-$1,000. Your realtor should be able to give you an idea of typical legal fees in your area.
These legal fees are part of the closing costs you should expect to pay once an offer is accepted on a house and the sale is finalized or closed. The general rule of thumb is to set aside about 4% of the purchase price for closing costs.
You’ll also need to forward your lawyer’s contact information to your realtor if it hasn’t already been included on your offer to purchase.
Provide your deposit
If you haven’t already done so, you will need to provide the remainder of a deposit to accompany your offer to purchase.
A deposit is a portion of your down payment, (your own money) that will go towards purchasing the home. The deposit is considered a “good faith” gesture showing that you are serious about buying the home, but the amount depends on the purchase price. While deposit amounts vary, and unless your realtor suggests otherwise, plan on making a deposit of 5% of your offer with a bank draft, official cheque, or wire transfer. Typically, you need to make your deposit within 24 hours of your offer being accepted, and the realtor will temporarily hold the deposit in a trust account.
Fulfill purchase conditions
If your offer on a house included conditions, you’ll need to fulfill them. Common conditions include:
- Obtaining financing
- Selling your current property
- Getting a home inspection
While mortgage pre-approval letters provide some assurance to purchasers and their real estate agents that a lender approves of the purchaser’s income and credit history, the lender also needs to approve of the specific property you want to buy.
Financing: Once your offer on a house is accepted, it’s important to book an appointment with your lender. Make sure you have a copy of the real estate listing, the offer, and up-to-date income information for all borrowers.
Home inspection: while home inspections aren’t mandatory, keep in mind that an inspection could help uncover construction and/or repair/replacement issues that could prove much more costly. Expect to pay in the range of $350-$500 for a home inspection by a qualified inspector.
Get the home appraised
An accredited home appraiser evaluates properties to calculate the current market value when a home is sold. Lenders require home appraisal reports before finalizing mortgage offers to protect their loan and make sure a property is worth what a buyer is paying for it!
Although banks or mortgage companies usually arrange appraisals, find out if you’re required to cover the cost - generally about $300.
Confirm your closing costs
You’ll soon discover there are many costs involved with buying and owning a home in Canada. And once your offer is accepted, you don’t want to get caught short of funds, as this could result in difficulties closing the deal. That’s why it’s important to save at least 4% of the expected purchase price as part of your plan to buy a home.
Closing costs include fees and charges such as legal costs, appraisal costs, home inspection costs, land transfer tax, and tax and utility adjustments. In most cases, however, purchasers don’t incur real estate commission costs as the seller pays the real estate commission.
Land transfer tax varies greatly depending on property location in Canada and the purchase price. Learn more about calculating land transfer tax to get a closer estimate of how much you should expect to pay, and don’t forget to check and see if you qualify for a homeowner tax credit or rebate.
Also, if you make an offer on a brand new home for sale from a builder, you might also have to pay GST on the purchase.
Give notice to your landlord if you’re renting
If you’re making the leap from a renter to a homeowner, remember to give notice to your landlord. You might even get the opportunity to receive some or all of your security deposit, and that can help cover the closing costs of your new home.
Plan your final walkthrough
You can negotiate how many additional visits you’re allowed to make before closing, but you should always plan for 2-3 visits, including a final walkthrough.
The visits give you a chance to bring a contractor in case you want to do any renovations before you move in to understand permits, cost, and timing requirements, and to plan how you’ll lay out the rooms in case you need to buy any furniture. The final walkthrough should be as close to the closing date as possible, as it’s a chance to make sure the house is in the same condition as when you submitted your offer, and to confirm the sellers have completed any work uncovered by the inspection.
Prepare for the closing date
Your offer will include your closing date, but be prepared for the date to shift. If your inspection uncovers any work that the sellers needs to take care of, or if your mortgage/loan application takes longer than expected to finalize, your closing date could get delayed. Your legal fees, including title insurance and adjustments, are due on your closing date.
Pay close attention to the dates that any conditions must be met once your offer to purchase has been accepted so that you complete each task as required. Bookmark this post (or save it to your phone’s home screen) and refer to it often to ensure you haven’t missed an important step when you’re buying your next home.
After you’ve completed these steps, there’s only one thing left to do: move in and make yourself at home. Congrats!