Many homebuyers and sellers believe that once the Agreement of Purchase and Sale has been signed, all that is left to do is wait for closing day. In reality, a great deal of important legal and administrative work takes place behind the scenes to ensure the transaction is completed successfully.
Understanding what happens during this period can help reduce stress and prepare you for a smooth closing.
The Agreement Is Reviewed
Once your lawyer receives the Agreement of Purchase and Sale, it is carefully reviewed to identify any legal issues, important deadlines, and special conditions that may affect the transaction.
If there are concerns or missing information, your lawyer will address them as early as possible.
Title Is Investigated
One of the most important steps is conducting a title search. This allows your lawyer to confirm that the seller has good title to the property and identify any registered mortgages, easements, rights-of-way, restrictive covenants, or other matters affecting ownership.
If issues are discovered, your lawyer works with the seller’s lawyer to have them resolved before closing whenever possible.
Mortgage Instructions Are Received
If you are financing your purchase, your lender will send mortgage instructions to your lawyer.
Your lawyer reviews these instructions, prepares the mortgage documents, and ensures that all lender requirements are satisfied before the funds are advanced.
Calculating Closing Costs
As closing approaches, your lawyer prepares a Statement of Adjustments.
This document calculates the final amount the purchaser must pay after taking into account the purchase price, deposit, property tax adjustments, condominium fees (if applicable), and other adjustments required under the Agreement.
Your lawyer will also provide a statement outlining legal fees, disbursements, Land Transfer Tax, registration costs, and any other expenses payable on closing.
Signing the Closing Documents
Before closing day, you will meet with your lawyer to sign the required legal documents.
During this meeting, your lawyer will explain each document, answer your questions, verify your identification, and ensure that everything is in place for a successful closing.
Preparing for Closing Day
On the day of closing, your lawyer works closely with the seller’s lawyer, your mortgage lender, and other parties involved in the transaction.
Funds are transferred, legal documents are registered electronically, and once all conditions have been satisfied, ownership of the property is transferred to the purchaser.
Only after the transaction has officially closed will the purchaser receive the keys to their new home.
How You Can Help
You can help avoid unnecessary delays by:
- Responding promptly to your lawyer’s requests.
- Providing identification and other required documents early.
- Arranging home insurance before closing if you are obtaining a mortgage.
- Transferring the required closing funds well in advance.
- Informing your lawyer immediately if there are any changes to your financing or personal circumstances.
Final Thoughts
Although much of the legal work takes place behind the scenes, the period between signing the Agreement of Purchase and Sale and closing day is critical to the success of your transaction.
Working with an experienced real estate lawyer helps ensure that potential issues are identified early, deadlines are met, and your purchase or sale proceeds as smoothly as possible.
If you have any questions about the closing process or would like to discuss any of the topics covered in this blog, I would be pleased to assist you. Feel free to contact The Law Offices of Eran Gevantschniter to discuss your real estate transaction and how I can help guide you through every step of the process.
Image by Gemini.