What happens during closing and what you need to know
Your house has sold. Celebrate!
For some, selling a home is like finding out a baby is on the way: you’re super excited, but also apprehensive about what the next few months – and the rest of your life – will hold. It’s normal to experience some anxiety around a big move! And, even if you are selling your home under the most favourable conditions, there is usually some nostalgia about leaving the memories behind.
As usual, your best defense against worry is a good plan to move forward. Rest assured that Jamie will guide you through every step of the closing and moving process.
A Legal Professional
Jamie is not alone in helping you through closing; he will help you build a professional team to see you through the closing period, which is typically anywhere from 30-120 days depending on what’s stipulated in your offer. Jamie can recommend an experienced legal professional to you. Your real estate lawyer will be taking on a long list of duties in the process of transferring the property from you to the buyer. Discharging real estate requires an intimate knowledge of the statutes, rules and regulations associated with real estate sales; you definitely want a legal professional on your side.
- Receive instructions from you about the sale of your property and/or discharge of your existing mortgage.
- Review the fully executed offer.
- Review and respond to the requisitions submitted by the buyers’ lawyer.
- Prepare the Statement of Adjustments.
- Prepare the draft of the Transfer/Deed.
- Prepare all supporting sale documents.
- Forward a request for a mortgage discharge statement for any existing mortgages registered on title.
- Meet with you to execute all sale documentation and get your keys on closing.
- Attend to the closing and effect the exchange of documents & monies.
- Go to the registry office to discharge the executed Charge/Mortgage.
- Deliver the balance of the sale proceeds (if any) to the real estate office or pick up at the lawyer’s office.
- Conduct all necessary correspondence and telephone conversations with any parties involved in this sale.
- Report to you.
What the Lawyer Needs from You
In order to do the best job possible as your advocate for closing on your home, certain items must be provided to your legal professional. Jamie’s team will be happy to facilitate your lawyer receiving the appropriate documents by fax, electronically as a DOC or PDF document, or per snail mail. He will also ensure that your lawyer receives a fully executed copy of the Agreement of Purchase and Sale and the MLS listing. Please provide either Jamie or your lawyer with the following documentation as soon as possible, so that your lawyer can prepare your file for closing well in advance of the actual closing date:
- Copy of Transfer/Deed (which is the ownership document you would have received when you first purchased the property);
- Details of any existing mortgages, including:
- Name and contact information of mortgage company
- Mortgage account reference number (if applicable)
- Current year's property tax bills (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 date.
- Total amount of property taxes paid for the prior year.
- Copy of survey if available (assuming the property is not a condominium);
- Your forwarding address and future telephone number (if available) and when these become effective.
Because many Canadians close on their properties in the summertime, legal offices can be swamped with short closings during the warmer months – so the sooner you can submit these documents, the better!
Things to Consider When Selling a Residence
Though you will definitely find out information as you go along, it’s always good to be prepared. Here are the things you should know so you’ll be prepared for a smooth closing on the sale of your Toronto home:
- Getting your money
Typically, the net proceeds of the sale are available by certified cheque, payable to you, at about 1 pm on the business day after closing day. The funds can be used to pay off any mortgages you may owe on the property, with the balance going to you. Should the buyer’s deposit, which is being held in trust for you by Jamie’s Royal LePage office until the sale closes, be greater than both Realtors®’ commission (plus H.S.T.), any excess funds from that deposit will be refunded to you directly from Jamie’s office after the transaction is completed.
- Multiple sellers
If two or more people are selling a property together, the lawyer will require you to confirm in writing how the net sale proceeds are to be divided if you require separate cheques to each owner; otherwise, you will be provided with just one certified cheque for the entire net sale proceeds that is payable to all registered owners.
If ownership of the sold property is in only one spouse's name, but the home is a matrimonial home, the other spouse who is not registered on title must sign a consent form for the sale completion that also outlines how the sum is to be divided.
- Meeting with the lawyer prior to closing
Most lawyers will contact you to set up a brief personal meeting in their office that should take place a couple of days prior to closing day. During this meeting, you will sign the closing documents and leave at least one key for the property with the office at that time. You may also be required to present photo ID at this meeting.
- Utilities checklist
You must arrange for final utility meter readings on completion of the sale, so that you will only be responsible for payment of utility accounts up until closing. If the home you sold is heated by oil, you will need to arrange to fill the fuel oil tank as of closing day and to pay the cost of filling the tank at that time. A copy of the final fill receipt should be given to your lawyer’s office when signing your papers prior to closing, so that upon closing, as indicated in the Statement of Adjustments, you will be credited for a full tank of fuel oil.
- Taxes & mortgage payments
Any property taxes, common expenses (in the case of a condo unit), or mortgage payments that fall due prior to the closing date must be paid by you before closing. Any necessary adjustments will be made by your lawyer’s office upon closing for any prepaid items that fall beyond the closing date.
It is your responsibility as a seller to make certain that any pre-authorized chequing plans or post-dated cheques are stopped at your bank for any payments falling due after the closing date, for expenses like property tax payments or common area expenses.