Contracts & Closings

Ontario Real Estate Contract

The Ontario real estate contract you use in the sale transaction is analogous to laying the foundation for building a house.  If the contract is properly prepared, your closing will go smoothly and both the Buyer and Seller will be happy and feel good about the transaction they have concluded.  The real estate contract MUST contain all of the agreements between the Seller and the Buyer, which will include: the selling price of the property, the amount of deposit paid by the buyer, conditions that have to be met by the buyer or seller before the contract becomes firm, items in or on the property that are included in the sale, a closing date, and so on. The Ontario real estate forms are 'fill in the blank', so they are quite easy to understand. The bottom line is ALL agreements between the buyer and seller must be in writing.

The contract may also call for the seller to give to the purchaser prior to acceptance of the real estate purchase form, a Residential Property Disclosure Statement, stating the condition of the property, including any material defects know to the owner.

The condition and requirement of each type sale and loan differ and you should utilize and complete Ontario real estate contracts WITH CAUTION AND AT YOUR OWN RISK.  It is wise to utilize an experienced real estate lawyer to assist you in preparing your real estate forms or at least reviewing them before you sign. 

All of your rights and liabilities are irrevocably established when the contract is signed.  

CLOSING

In the Province of Ontario, lawyers that specialize in real estate transactions handle the closing process. The buyer's lawyer will conduct necessary searches of the property and prepare all the paperwork. They will also receive the mortgage funds from your lender. On closing day, the buyer's lawyer sends everything to the seller's lawyer and the transaction will 'close' or be completed.
 

CHECK LIST FOR ITEMS THAT WILL BE PERFORMED  IN PREPARATION FOR CLOSING

ON ALL SALES

Both buyer and seller should give their lawyer a legible copy of the signed Ontario real estate contract with all revisions. They should also include copies of any amendments or waivers that form part of the sale.

The seller should give their lawyer the name and address of every mortgage company (including loan number) or individual who holds a mortgage on the property being sold.

The buyer must arrange for a homeowners insurance policy.  Give your lawyer the name of insurance agent as soon as possible and have a copy of the policy forwarded to them..

Both the buyer and seller should contact all utility companies that service the property and make arrangements for the transfer of ownership.  

A few days before closing, the buyer and the seller will each meet with their lawyer to sign all paperwork. The buyer will take with them a certified cheque for the amount of money needed to close and the seller will give their lawyer a set of keys to the home.

On closing day and after the transaction has closed, the buyer will go to their lawyer's office to pick up the keys to their new home.

ON MORTGAGE ASSUMPTIONS

If the buyer is assuming an existing mortgage on the property, make sure the Ontario real estate contract contains a condition allowing time for the mortgage company to approve the buyer. Assuming an existing mortgage on a property is no different than applying for a new one. The buyer must go through the mortgage companies approval process.

ON ALL NEW LOANS

Give your mortgage company a legible copy of the signed Ontario real estate form with all revisions. Also include copies of any amendments and waivers.

Provide your mortgage company with the name and contact information for your real estate lawyer and the insurance company that you wish to use.

The buyer should contact their lawyer as early as possble to get an estimate of the closing costs and understand the approximate amount of funds that they will need to close.

If required, make sure a survey has been ordered and have it forwarded to the buyer's lawyer.
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IF YOU HAVE ANY QUESTIONS REGARDING ANY ASPECT OF THE CLOSING, PLEASE CALL AND DISCUSS THIS WITH YOUR LAWYER OR MORTGAGE COMPANY PRIOR TO THE CLOSING!