What Happens at Settlement
Once you have found your desired property, the first step is to pay a holding deposit as soon as possible to register your genuine interest with the seller. There is no binding agreement until a contract is signed, hence the holding deposit is refundable unless otherwise specified.
During step two, you must talk to the agent if you intend to use a solicitor. The agent will then organise a copy of the contract which you will need to sign. There is a five-day cooling off period wherein you can exercise your right to pull out of the contract.But once the cooling off period ends, you must settle the initial payment. Therefore, approval of your home loan application is urgently needed at this stage, so that you can commit to the contract.
You must also arrange for pre-purchase inspections as the vendor is not obliged to advise you of any defects that the property may have. Hence, you must initiate property inspections to determine whether there are construction expenses that need to be undertaken. This is also a great way to learn whether the property is within the standards of the building code and whether the asking price is appropriate.
The next stage will involve negotiations on the contract. For this, you can consult a broker or a home loan consultant before finalizing the deal.
Once you are satisfied with the renegotiated terms of the contract, you must sign the contract of sale and obtain a 66W Certificate which waives the cooling off time frame. You and your broker will have to meet with the solicitor of the vendor to finalize the deal. You will give them the counterpart contract that you have signed, the deposit cheque for the initial payment and the 66W Certificate.
Then, the parties involved will ensure that your copy of the contract and their copies are identical in all aspects. If there are discrepancies, it could form grounds for the contract to fall over. Therefore, this is a very crucial stage. After the checking, you and the vendor will exchange copies.
Once the contracts are exchanged, the property cannot be sold to another person and you must complete the contract. If you fail to do so without a valid reason, the deposit or 10% of the purchase prize is forfeited and/or any losses incurred by the seller must be paid.
In four to six weeks, you will need to complete the balance of the purchase. It is important that the date of completion is mentioned in the contract for clarity’s sake. At this stage the only instance in which you can withdraw from the contract and get your money back, is if the title is defective.
After this, the deal is completed. You will then receive the certificate of title, the property transfer that is signed by the vendor, and the discharge of mortgage that is registered. In return, you must give the vendor the settlement cheques and the authorization that the agent can release the deposit.
During the final stage, you will hand the lender the certificate of title, the transfer, the mortgage discharge, the caveat withdrawal and the notice of sale. The property will then be registered with the Land Titles Office on your behalf. You will also have to pay a Stamp Duty fee and GST.
