Frequently Asked Questions Regarding Real Estate Closings
1. Do I need to attend the lawyer’s office on closing day?
Usually, no. Most clients sign their documents and deliver the necessary funds before closing day. The lawyers then complete the closing electronically.
However, clients must remain available in case an unexpected question, missing document or funding issue arises.
2. Can I move into the property before the closing is complete?
No. Buyers should not enter or begin moving into the property until their lawyer confirms that the transaction has closed, and possession has been released.
3. Can the seller leave furniture or unwanted belongings behind?
The seller should remove all belongings that are not included in the Agreement of Purchase and Sale unless the parties have agreed otherwise.
If unwanted property is left behind, the buyer should contact their lawyer and real estate agent before disposing of it or taking other action.
4. What happens to the seller’s mortgage?
The seller’s lawyer will normally obtain a payout statement and arrange to pay the mortgage from the sale proceeds.
Depending on the lender and the transaction, the formal discharge may be registered after closing. The seller’s lawyer will address the discharge in accordance with the closing documents and professional obligations.
5. When will the seller receive the sale proceeds?
The seller generally receives the net proceeds after the transaction has closed and the required payments, deductions and holdbacks have been addressed.
Banking processing times may affect when the funds appear in the seller’s account.
6. Will the buyer receive a copy of the deed?
After closing, the buyer’s lawyer will normally provide a reporting package containing the registered transfer and other important closing documents.
The transfer confirms that ownership was registered in the buyer’s name. Ontario’s official land registry records are maintained electronically.
What Time Does a Real Estate Closing Usually Finish?
There is no guaranteed closing time.
A transaction may close earlier in the day when:
- The mortgage funds arrive promptly.
- All documents were completed in advance.
- The parties have provided the required closing funds.
- There are no title or registration problems.
- Both lawyers are ready to complete the transaction.
A transaction may close later when:
- The lender sends funds late.
- Additional documents are required.
- The buyer’s funds have not cleared.
- The seller is completing another purchase on the same day.
- A title, tax or registration issue arises.
- The parties are resolving a last-minute dispute.
Clients should remain available by telephone and email throughout the day.
When Does the Buyer Receive the Keys?
Buyers frequently assume that they will receive the keys first thing in the morning. In most transactions, that is not how closing works.
Keys are generally released only after:
- The buyer’s lawyer has received all required funds.
- The closing funds have been delivered to the seller’s lawyer.
- The transfer has been registered.
- The lawyers have confirmed that the transaction is complete.
The closing may occur at any point during the business day. A buyer should not assume that keys will be available at a particular time.
Depending on the arrangements, keys may be:
- Retrieved from the real estate brokerage.
- Picked up from the lawyer’s office.
- Released through a lockbox.
- Provided through an electronic access system.
- Left at another agreed location.
The buyer should confirm the key-release process with the lawyer and real estate agent before closing.
What Can Delay a Closing?
Even a well-prepared transaction can encounter unexpected issues.
Common causes of closing delays include:
Late Mortgage Instructions or Funds
A buyer’s lawyer may be unable to complete the purchase until the lender provides the necessary instructions and mortgage advance.
Insufficient Buyer Funds
A closing can be delayed if the buyer has not delivered the required funds or if the amount delivered is insufficient.
Identification or Signing Problems
Missing identification, unsigned documents or errors in a client’s legal name can interfere with the closing.
Title Problems
A title search may reveal an unexpected mortgage, lien, writ, ownership issue or other registered interest that must be addressed.
Property Damage or Vacant-Possession Issues
A buyer may discover that the property has been damaged, has not been vacated or contains items that should have been removed.
Banking or Wire-Transfer Delays
Closing funds may be delayed by financial institutions, wire-transfer processing or trust-account verification requirements.
A Related Transaction Is Delayed
A buyer may be relying on the proceeds of another sale, or a seller may need the sale proceeds to complete a purchase. A delay in one transaction can affect another.
What Happens if the Transaction Does Not Close?
Failing to close a real estate transaction can have serious legal and financial consequences.
Depending on the circumstances, the party that is ready, willing and able to close may take steps to preserve their legal position. This can involve formal closing procedures, negotiations regarding an extension, claims for losses or court proceedings.
Potential consequences may include:
- Loss of the deposit
- Interest and carrying costs
- Additional legal fees
- Moving and storage expenses
- Temporary accommodation costs
- Claims for a difference in resale price
- Claims for damages
- Litigation
The legal consequences depend on the Agreement of Purchase and Sale and the facts of the transaction. A client who believes that a closing may not occur should contact their lawyer immediately.
Different rules and warranty protections may apply to certain newly built homes. Tarion provides information about firm and tentative closing dates, permitted delays and delayed-closing compensation for qualifying new freehold homes.
Contact
For better assistance regarding your questions and inquiries for Real Estate transactions, contact Minhas Lawyers. We are always there to help you solve your problems!
Email: [email protected]
Phone: (905) 671-9244
Serving Mississauga, Brampton, Toronto, the Greater Toronto Area, and clients throughout Ontario.
This article is provided for general informational purposes only and does not constitute legal advice. Real estate transactions vary, and the rights and obligations of the parties depend on the Agreement of Purchase and Sale and the specific circumstances. You should obtain legal advice regarding your particular transaction
