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What happens after subjects are removed? Next steps in the home purchase

So you have an accepted offer on a house and are waiting for subjects to be removed! Many clients wonder what happens after subjects are removed. We will be guiding you step by step on what to expect once subjects are removed.

What are subjects?

Subjects are part of the terms and conditions in the purchasing contract of a home. The subjects need to be met before a certain date that is specified in the contract. 

These could include obtaining the strata documents from the sellers to review. Or as a buyer, it could be making sure you are satisfied with your mortgage details. All of these subjects need to be met before the subject removal date for the purchase to go through.

What happens after subjects are removed?

When subjects are satisfied and you agree to the purchase, you are required to place a non-refundable deposit on the property to remove subjects on the purchase agreement. The standard deposit amount in Vancouver is 5% of the initial asking price.

Once subjects are removed, the purchase agreement is now a binding contract. 

What are the next steps after subject removal?

There are a few last steps involved before your home purchase is completed! 

Before Completion Day, you need to:

  • Choose a lawyer or notary (if you haven’t already)
  • Arrange home insurance
  • Consolidate your down-payment
  • Prepare for completion day
Choose a Lawyer or Notary

Once subjects have been removed it is time to choose your lawyer or notary. Notify your Realtor on who you would like to use as your lawyer or notary to complete the transaction. Your lawyer or notary facilitates the mortgage signing, transfers property title, registers the mortgage and registers title insurance. This is an important step to complete as soon as possible. 

Arrange Home Insurance

You must have home insurance arranged on your property. This is required before your lawyer or notary releases mortgage funds. Most lenders require you to pre-pay a year’s worth of home insurance. Bring confirmation of this home insurance to your lawyer’s office when you sign the mortgage documents. 

Consolidate Your Down-Payment

To keep the process moving smoothly, begin consolidating your down-payment into one account as early as possible. That means that you need to collect and transfer the amount of your down-payment into one account.

If you plan on using your RRSPs in the Home Buyers Plan, it requires the government form “T1036 – Home Buyers Plan Request to Withdraw Funds from RRSP.” Bring this form, and a copy of your purchase agreement to the institution that issued your RRSPs so they can arrange your withdrawal. 

Transferring funds out of your RRSPs often takes multiple days to transfer into your designated account. By transferring your down-payment into a single account, your withdrawal on completion day will be smooth and easy.

Prepare for Completion Day

Your lawyer will be in contact with you during this process and inform you on what to bring for completing the transaction. You will be instructed to bring confirmation of your home insurance, and a cheque that will include the following amounts for:

  • Down-payment (minus the deposit amount)
  • Legal fees 
  • Title insurance fee
  • Property transfer tax amount
  • Property tax / Utility bill adjustments
What happens on Completion Day?

Completion Day is the day to complete your side of the transaction. Finally, the day has come for you to take ownership of the property. On this day you will bring the requested cheque to the lawyer or notary, and sign the required documents to finalize your side of the sale. 

Under the guidance of your lawyer or notary you will be signing your mortgage documents, transferring the title of the property, registering the mortgage charge and registering the title insurance.

After all the required documents are signed and your fees are paid, your side of the transaction is complete!

What happens on Possession Day?

Today you pick up the keys to your new home! Possession Day usually happens the next day or so after Completion Day. However, this depends on the agreed upon dates in the purchase contract.

What are the closing costs for buyers?

Wondering what the closing costs for buyers are? By the time you sign a mortgage commitment letter as a buyer, you’ll have a good estimate of the closing costs involved. Check out our website for closing costs for buyers and our recent blog post on hidden costs when buying a home!

For more information on real estate market in Vancouver, current trends, buying a home or selling a home, contact Leo Wilk – Your Top Vancouver Realtor

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