What Every Property Buyer Needs to Know After Signing the Offer to Purchase
Congratulations! You’ve signed your offer to purchase a property—a huge milestone in your real estate journey. But now the clock is ticking. From securing fire insurance to ensuring your lawyer has the necessary documentation, every step is time-sensitive. Let’s break down the essential steps you need to take to ensure your real estate purchase proceeds smoothly.
1. Secure Fire Insurance Immediately
Fire insurance isn’t just a good idea—it’s a legal requirement to close most property purchases. Lenders require proof of insurance before releasing funds, and your lawyer cannot finalize the transaction without it.
Start by contacting your insurance broker or a reputable insurance company to arrange coverage for your new property. Be prepared with key details, such as the address, the type of property, and its value. Don’t wait until the last minute; arranging fire insurance early ensures you avoid delays in closing.
Pro Tip: If your new home is in an area prone to flooding or other risks, inquire about additional coverage to protect your investment.
2. Obtain Additional Funding Right Away
If part of your down payment or closing costs relies on external funding—such as grants, savings plans, or financial aid programs—you’ll need to act fast. Programs like the First-Time Home Buyer Incentive or funding from organizations like the Manitoba Metis Federation often have specific timelines for fund disbursement.
Start by gathering all required documents to prove your eligibility and submit your application as soon as possible. Some programs require additional processing time, which could cause delays if not addressed promptly.
Quick Reminder: Check whether your funding source requires you to use the funds exclusively for specific costs, such as the down payment, or whether you can apply it toward other expenses.
3. Contact Your Bank About Mortgage Instructions
If you’re financing the purchase with a mortgage, your lender must send your lawyer the official mortgage instructions at least a week before closing (and preferably two weeks). These instructions detail how much the lender will provide, the conditions for disbursement, and other legal requirements. They take time to review for potential issues, and to turn into signable documents so you’ll need to meet with your broker or financial institution right away and get them to send their instructions immediately after that.
Here’s how to ensure this process runs smoothly:
- Inform Your Bank: Notify your lender immediately after signing the offer to purchase. Ask them to send the mortgage instructions directly to your lawyer without delay.
- Stay in Communication: Follow up with your lender to confirm that the instructions have been sent.
The sooner your lawyer receives these documents, the faster they can prepare the necessary paperwork for closing.
Final Thoughts
Buying a property is an exciting yet complex process. Once you’ve signed the offer to purchase, every step you take can make or break your deal’s success. By securing fire insurance, arranging additional funding, coordinating with your lender and lawyer, and preparing your closing funds, you’ll ensure a smooth transition to homeownership.
The key is to act quickly and stay organized. If you’re unsure about any step, your lawyer is your best resource for guidance. With these steps in place, you’ll be well on your way to closing day with confidence.
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