Talking closing with award winning Vancouver realtor Paul Toffoli
Mark: Hi, it’s Mark Bossert from Top Local Lead Generation. We’re here with Mr. Paul Toffoli, he’s an award winning realtor voted by his clients as Best Realtor in Vancouver and we’re going to talk about closing today. How’re you doing today Paul?
Paul: I’m well today Mark, thank you very much.
Mark: So closing, lawyers, notaries - all that stuff.
Paul: Yeah, this is when all the hard work and all the stress and anxiety of going through the home search or the stress of selling your home and having to keep it clean all the time and having all those people traipsing through your home - this is when it all pays off. This is when, oh my god, we have a new home whether you’re selling or buying it’s the day of having a new home. It’s a very straightforward process, it can be very stressful, so just because you’re moving. One of the most stressful things in life, I think what they say, is moving from one home to another. So, the more prepared you can be, both physically and emotionally, the better off you’re going to be.
So let’s just talk about what the process is from a legal perspective, from the paperwork perspective and then can talk about some of the other ins and outs of moving. I didn’t mean that as a pun. So, legally you’ve gone through this contract process, you’ve negotiated your contact with the help of your realtor, you’ve gone through your subject removal, you’ve had your inspection, you’ve done all those types of things. At the time of subject removal, you would of paid a deposit into the realtors trust account. Typically it’s the buyers agents trust account and that’s held in trust just towards the closing of the sale. About the last week before the sale, the buyer will go into their notary or their lawyer’s office, the seller will go to their lawyer or notary’s office and sign the land title transfer documents, the buyer will sign the mortgage documents and will go through that whole process. It’s fairly straightforward, but basically before the buyers goes in, the notary will say, this is the amount of a deposit or a bank draft you need to bring in. So basically the way the funds work, we have the purchase price of say $300,000, you’ve paid a deposit of $15,000, you’re putting 20% down - there’s other fees that come out of that including the lawyers fees, there may be some other items that need to be adjusted for like property taxes etc. The buyers notary will prepare a statement of adjustments that takes all those things into account, the seller’s lawyer or notary will look at those items, confirm that, there will be agreement. A few days before completion, the buyer goes in, goes through all those documents, signs the mortgage documents, the lawyer will send a request to the real estate company holding that deposit and request that those deposit funds be transferred and give them directions as to where any excess funds would go, how commissions are to be paid and so forth - so that money gets transferred to the buyer’s lawyer.
On the completion day, the buyer’s lawyer will then send a request to the bank or the mortgage company for the balance of funds that are being lent. Those funds get combined. There will also be a cheque, typically that balance of the deposit that would be brought in by the buyer at the time they sell. All those funds are combined. Once the right amount is there, the buyer’s notary or lawyer will transfer those funds to the seller’s lawyer or notary, who will then pay off the mortgage that’s sitting on the title, and any excess funds in addition, any outstanding strata fees etc, will then be paid out to the seller. The seller will then do what they want, if they’re buying another property they may transfer some of those funds to another property, they may put them in their bank account, whatever they decide to do that is up the seller because that’s their money at this point in time.
Things that sometimes stress people out is how do we adjust for property taxes, how do we adjust for strata fess, i’ve got to transfer BC Hydro into my name, got to call Telus, got to call the gas company - all those things. So those are all minor steps that you can take care of well ahead of time. But the statement of adjustments will be prepared by the lawyers, will have all the financial accounting dealt with and you just have to take your time and go through it. Make sure that the lawyer or notary explains it to you, if you’ve got any questions, make sure that you’re questions are answered so you have a real comfort level. Once the buyer’s lawyer notifies the seller’s lawyer that those funds have been gathered and are ready to be picked up by the courier, then permission will be given to transfer the title at Land Titles and that’s really the key moment and that happens on completion day. As soon as that title is registered at Land Titles as having been transferred, previous mortgage is being paid off, all those things are dealt with, then the buyer becomes the new owner. Now does that mean they’re walking in that day, moving into their new home? No, because typically completion is the following day or sometimes 2-3 days afterwards. It can sometimes be the same day, but that’s rare. that’s to make sure that the seller has received their funds before the buyer actually gets the keys. So say the day after or a couple days after, typically at 12 noon, they buyer is going to get the keys to the property. Those arrangements will be made through the realtors, so the listing agent, the seller’s realtor will make arrangements with the buyer’s realtor to get the keys. If I’m working for the buyer, I meet the buyer at the property, typically we do a walk through to make sure everything is as expected and go from there. Often in this situation is when you discover that the seller’s abilities to clean and the time they had, or the expectations on how they have to leave the property are not the same as the buyers hoped they would be.
I always tell my clients who are buyers to have an expectation that the property may not be as pristine and clean as you hope it will be. Most often we’re pleasantly surprised and the seller’s do an excellent job on cleaning, but it is the one area where due to people being rushed to get out the door, that moving to a new home that they’re probably going to have to clean. Sometimes there are challenges to cleaning. So we just want to be prepared mentally and emotionally that it may not be perfect. And sometimes I’ll get a phone call to help my clients to connect with cleaners etc. It’s really an exciting day. It’s very stressful day because of the moving and the movers and all those things, but it is a very exciting day.
Mark: So what other than walking into maybe not as clean a home as you’d like, what else can go wrong? What if there’s timing issues? What if somebody doesn’t get out in time?
Paul: Yeah, this is something that happens very rarely, but occasionally you have a situation where maybe, the seller’s mover is late arriving, they’ve over booked themselves. Or maybe it’s a tenanted property and the tenants haven’t been able to organize their move as they will and really that’s why you want to have realtors involved because it can become quite emotional and quite stressful. I’m the buyer and I’ve just moved out of my previous home, I’ve got everything in the truck, I pull up the curb and I see that the sellers are still moving out. This is where you want to have realtors who are communicating with each other and making sure that it’s all clear. Because if I know the day before, as a buyer, that there might be a problem on the timing, I’m going to talk to my mover and maybe talk to the person who’s bought the place I’m moving out of or maybe it’s a rental, the landlord, and say look we might have a bit of a hitch, we might have to leave a couple hours later, how can we work it out? Usually if the realtors are communicating with each other and are doing a good job, you don’t have surprises. It happens occasionally and then it’s like, well maybe, I’ve got some resources, maybe I’ve got another moving company that I can refer or bring some extra resources in. But it’s going to be a stressful day, you have to be prepared for a few surprises, but the more communication the more conversation there is between various parties ahead of time the more smoothly it’ll go.
Mark: And that’s it. That pretty much sums up closing. Pretty straight forward process and if you are, in my experience, well prepared for your move there’s a lot less stress than if you’re last minute moving and trying to clean as your backing out the door.
Mark: We’ve been talking with Paul Toffoli. Again he’s been voted Best Realtor in Vancouver by his clients. You can reach him at www.toffoli.ca or give him a call 604-787-6963. Thanks Paul
Paul: Thank you Mark