Spring means more people signing real estate deals. Besides the price to be offered, you also need to think carefully when choosing your closing date, so that your deal will close smoothly.
Here are 7 things to remember:
1. Do not choose a Friday at the end of a month. This is typically the busiest day in most real estate law offices, especially in the summer. This results in many deals not being able to close until late in the day, close to 5 or 6 pm. Worse, if the deal has to be extended, you don’t get keys until the following Monday, or maybe Tuesday if it is over a long weekend.
2. Close your deal on a Wednesday, if possible. If there are delays, it is much easier to manage a one day extension than an extension over a weekend.
3. Sellers, you need to plan to be out of your home by 3 pm on the closing day. Under most real estate contracts, sellers must turn over possession as soon as the deal is registered electronically. In normal practice, when the closing is not at the end of a month on a Friday, the deal will likely be registered by 2 – 3 pm. Vacant possession must be given to the buyer at that time. There was a case where a seller had to compensate a buyer for increased moving costs when they were late getting out of the home.
4. If you are buying and selling a home in the same time period, close your purchase 2 days early and get bridge financing to assist you. You will close your deal without pressure and have a few days to move in while you wait until your sale closes. This will also make it much easier to negotiate an extension, if you have to, as you will not be dependent on the money from your sale to close your purchase.
5. Sellers, remember that you must turn the house over in broom swept condition, which means no garbage. Buyers, make sure you schedule you schedule your final visit 2 days before closing to make sure that the seller is properly cleaning up.
6. Buyers should not plan to move in until late in the day or the day after closing, as you do not want to have to pay extra to your movers if the closing does not happen until late in the day or the deal has to be extended.
7. Even if you are not moving in on the day of closing, buyers must make sure to get in and check the condition of the home on the day of closing, to make sure that nothing has been broken or damaged since the date that you signed your contract to buy. The seller typically only warrants that everything will be working on the closing date, not afterwards, so find out right away if you need to make a claim about anything after closing.
By doing your homework before choosing a closing date, you should be able to avoid pitfalls later.
Read the original article on the Toronto Star: http://www.thestar.com/business/personal_finance/2014/04/25/close_your_home_purchase_on_a_wednesday_weisleder.html
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I have received many inquiries about my law practice, providing legal services to real estate buyers, sellers and investors. Working with Real Property Transaction Centres, I am now able to close real estate transactions throughout the GTA. If you require any assistance on a transaction that you are working on, please email me at firstname.lastname@example.org
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About Mark Weisleder
Mark is a lawyer, author, instructor, Toronto Star columnist and keynote speaker for the real estate industry.