CLOSING THE SALE(S)
Closing Day … is not a time for packing and organization. But, be sure you have not packed anything that you agreed to sell! Unless you specifically mentioned certain fixtures, everything must remain in place.
You are responsible for handing over the home in the same condition it was when the Buyers purchased it at the time of closing. This applies to everything that was in the agreement. If the home suffers a major disaster, you are responsible for telling the buyer, at which point the buyer may walk away from the deal and have the deposit returned. The buyer may also choose to close and receive any insurance proceeds. In this unfortunate event, remember not to make any repairs until you find out what the buyer wants to do.
Your Agreement of Purchase and Sale states that the balance of the purchase price on the closing date will be paid by certified cheque subject to the usual adjustments.
On a resale home, an adjustment is any item that has been prepaid by the Seller which is applied beyond the closing date and will benefit the purchaser after the closing date. The amount that has been over paid by the Seller is pro-rated, and a credit is given to the seller as an adjustment on closing.
Examples of such adjustments on the sale of a home are for prepaid realty taxes, prepaid condominium fees (if the property purchased is a condominium), and fuel oil (if property has an oil furnace).
Documents required by you the sellers to provide to your lawyers
- Copy of your Agreement of Purchase and Sale – usually a copy is faxed to our office by your Real Estate Agent;
- Confirmation that you have contacted the hydro company to arrange the final reading of your meter. Contact your Hot Water Tank and/or Security companies to update their records.
- Details of any existing mortgages or lines of credit against the property (Name of lender, address & phone number, loan reference number)
- An existing survey of the Property if in your possession;
- Current year’s realty tax bill, including any existing property tax bill and any future bill received prior to closing as well as details of payments being made by you prior to closing;
- Your forwarding address and future telephone number;
- At least one key to the property – provided when you attend our office to sign all closing documentation.
The Closing Day(s)
Once signing the agreement, both the seller and buyer are under a legal obligation to close. If you decide not to for whatever reason, the buyer has the right to sue.
If the buyer decides to walk away from the deal, you can claim the buyer’s deposit or sue for damages.
When a property is being purchased with a mortgage, the lender will forward the mortgage funds to the purchasers’ lawyer’s trust account usually before 12:00 pm. The closing funds are then certified and forwarded to the sellers’ lawyers by courier along with all closing documentation.
The lawyers will hold all funds and keys in escrow until the Buyers are registered in the Land Registry Office as the new owners of the property. Once registered, the lawyers’ office will release funds, keys and any other items held once the transaction is complete – usually in the late afternoon before 5:00 pm.
NOTE: If you are buying and selling arrangements can often be made with you Lender to have the closing dates for example a week apart. Why? This gives you time to take ownership of your next home a week earlier than the day you will be required to leave your current house before 6:00 pm on Closing Day. Having the same closing day for both properties can be very, shall we say, intense!