How The Closing Process Works - A Checklist Of The Critical Steps

By: Thomas Cook

How The Closing Process Works - A Checklist Of The Critical Steps

Now that you’ve accepted a buyer’s offer, there are still a few offer details that must happen. 
 
First, any conditions that the buyer, or you, have inserted into the offer must be satisfied and either a Waiver or a Notice of Fulfillment must be signed by the relevant party. 
 
Typical buyer conditions could be to arrange financing, have a home inspection, a satisfactory review of the condo Status Certificate or even sometimes conditional on having the offer reviewed by the buyer’s lawyer.
 
Once those have been signed, your sale is now considered to be ‘firm and binding’.
 
The buyer’s deposit with their offer - typically about 5% of the purchase price - needs to be delivered almost immediately after offer acceptance to your listing broker’s office and deposited into their trust account. 
 
Their offer deposit is credited towards the buyer’s total down payment and closing costs.  If the buyer doesn’t provide that deposit, the sale may be in trouble.
 
Once all the conditions have been removed and the buyer’s deposit is now in the possession of your listing agent’s office, you can start to relax a bit.  Your home is sold.
 
BUT, the fun isn’t over just yet.  Now your lawyer must close the transaction on your behalf.
 
What Happens Next…
 
You now need to choose a lawyer to represent you to close the sale.  We always ask ‘Do you have a family lawyer that you’ve used in the past?’. 
 
If not we’ll recommend two names, have you contact both of them to see who you feel most comfortable with and then we’ll forward all the offer documentation on to them.
 
Lawyers usually need a minimum of 10 days to two week’s notice to close your sale on time, although the most common closing period is typically between 30 to 60 days.
 
During that closing period, whatever length of time it is, it’s going to be busy for you.  You’ll need to pack, organize a moving truck, reserve your condo elevator for the moving day and change over all the billing addresses for credit cards, your bank, driver’s license and so on. 
 
We have a Moving Checklist that we send out to our clients to help keep them organized.
 
Meanwhile your lawyer gets in touch with your mortgage lender to get a discharge statement.  They’ll be communicating with the buyer’s lawyer to coordinate the closing and transfer of funds. 
 
Finally, with all the loose ends organized, you’ll set a time to go and meet with your lawyer in person a day or two before the completion date to sign all the closing documents.
 
In the event you’re not in town for this part, your lawyer can arrange to courier all the paperwork to you and have you sign it with your local attorney and then courier everything back to the Toronto lawyer’s office.
 
On the closing day, the buyer’s lawyer wire transfers the balance owed by the purchaser into your lawyer’s trust account and then both lawyers go online and electronically transfer the title from your name into the buyer’s name.  Now the sale is complete.
The seller’s lawyer will then cut a cheque to the listing broker’s office to pay for any balance of commission due over and above the amount of the deposit already being held by them. 
 
If the listing brokerage is holding a deposit larger than what’s owed, the real estate broker’s office will cut a cheque to the seller for the overage.
 
If you’re just selling, you will make arrangements for your lawyer to transfer the balance of funds over to your bank account after all closing costs have been paid - see the ‘Closing Costs’ chapter to see how those are broken down. 
 
If you are purchasing another property at the same time, your lawyer will then, with your permission, take the funds from your sale and apply them to that purchase.

Thomas Cook
Thomas@LivingInToronto.com
647-962-1650


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