What Actually Happens on Closing Day
- October 12, 2016
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WHAT HAPPENS ON THE DAY OF CLOSING
On the day of closing, the Purchaser’s lawyer will receive money from mortgage company (if Applicable). When you get the mortgage money will depend on the financial institution lending the money. If all their conditions having been met, the money should arrive anytime between 8:30 am and 5:00 pm. With the money received previously from the clients, the lawyer transfers the necessary funds to the Seller’s lawyer.
Once the Seller’s lawyer has received the funds from the Purchaser’s lawyer, the Seller’s lawyer delivers to the Purchaser’s lawyer all the signed documentation, keys, and then releases the Transfer/Deed to be registered by the Purchaser’s lawyer.
Closing the Deal
The Purchaser’s lawyer will make sure all the documents are correct, satisfactory, and signed and that all undertakings have been complied with and/or obtained from the lawyer and the Sellers. The lawyer then does an Execution Search on the both the Purchasers and the Seller to ensure that on the date of closing there are no judgements registered against anyone as of that date. The Purchaser’s lawyer will then do a sub-search of the property to make sure there have been no other registrations (i.e. mortgages, liens, notices, etc.) registered on the property since the lawyer did the full search just prior to the Requisition Date.
Once the lawyer has double checked everything, they will register the Transfer/Deed and, if applicable, the Mortgage(s). The Title Insurance is obtained the policy will be finalized. If there was a Mortgage, a reporting letter with documentation will be prepared and delivered to the Financial Institution. Once that has been done, the Deal is closed and the Purchaser’s lawyer will release the keys to the Purchasers. The Seller’s lawyer will release the money to the Sellers.
Time to Move Out
Contrary to whatever you have heard from anyone else, the Sellers do not have till 6:00pm or 11:59pm on the day of closing to move out. The Agreement of Purchase and Sale states that the transaction must be completed before 6:00pm on the day of closing. It further states that the Seller must give vacant possession upon closing. Your real estate agent can put in a clause that states otherwise. Many deals get closed earlier in the day and even as early as 8:30 am on the day of closing. Once the key and Deed have been transferred to the Purchaser, the money has been transferred to the Seller’s lawyer and everything has been registered, the deal is closed.
Once that happens the purchaser owns the property and it should be vacant so the Purchasers can move in! If it is not, the courts have held that this is a breach of contract. The Sellers can be sued for any damages the Purchasers incur. If the Sellers are not out of the house by 11:59pm the day of closing, this can be considered a fundamental breach of contract. This may allow the Purchasers to back out of the deal and get their money back.
Patience is a Virtue
The reality of the situation is that most Sellers wait to make sure the deal closes before moving. The Purchasers are left waiting for the Sellers to move out before moving in. We encourage Sellers to arrange to move out before the closing date. Or better yet, if buying a new property, bridge finance and move into the new home a couple of days before selling. If the Sellers are still moving out when the Deal closes, we encourage that Purchasers have a little patience. See if there is a spot you can start moving stuff into. One day you will be the Sellers. It will all work out in the end.
A Quote by Joyce Meyer best says it:
“Patience is not an ability to wait, but the ability of keeping a good attitude while waiting“