How Long Does it Take to Close on a House?

| Buying

Whether you’re buying or selling a home, the Agreement for Purchase and Sale sets the closing date and timeline that keeps an entire team of inspectors, lenders, agents, and lawyers on task. That includes clearing all the conditions outlined in the agreement to firm up your contract. So how long does it take to close on a house in Toronto?

While a typical closing on a house takes 30 to 45 days from the offer acceptance, the terms and conditions of each sale impact your timelines. Here’s how the typical closing goes down.

What is a closing date in real estate?

The closing date, aka the completion date, is the date the buyer becomes the official owner of a property, and the transfer of funds, title registry, and new legal ownership takes place. The time between the seller accepting the offer and the closing date is called the “closing period” when the legal and financial tasks are completed.

How Does a Home Inspection Impact Closing on a House?

When a seller accepts an offer, the buyer and seller enter a conditional period of about 5 to 10 days. During this period, the home inspection takes place to assess heating, plumbing, electrical, and roofing and discover what buyers consider “deal breakers.” When there are no issues, the closing date stands and the closing process begins. However, when inspections reveal issues, the buyer can either back out, request further inspections by an expert such as an engineer, or try to negotiate a discount. These steps lead to delays as any new conditions must be completed to the buyer’s satisfaction to set the closing process in motion.

What is involved in closing on a house in Toronto?

There are two sides to the closing process:

1. The Buyer (Purchase)

Buyers require a real estate lawyer to open a file and perform the following closing tasks:

  • Gathering and confirming personal information and identification
  • Checking for conflicts of interest
  • Preparing a retainer agreement or engagement letter
  • Reviewing the Agreement of Purchase and Sale to understand the details and deliverables
  • Conducting a title search to discover issues such as liens, easements, outstanding property taxes, potential title challenges, non-compliance for renovations, etc.
  • Reviewing condo Status Certificates to ensure financial health
  • Submitting requisitions to the seller’s lawyer
  • Preparing mortgage documents and title insurance
  • Preparing and reviewing the Statement of Adjustments
  • Managing closing funds
  • Finalizing the exchange of documents and funds on closing day
  • Other agreement-specific tasks, such as managing issues they discover
  • Handing over the key to the new owner’s on the possession date (Possession dates can take place after the closing date but not before).

Get more answers to your home-buying questions with these posts next: 

2. The Seller (Sale)

On the flipside, the seller’s lawyer manages the following during the closing period:

  • Reviewing the Agreement of Purchase and Sale
  • Obtaining and reviewing the parcel register and property tax information
  • Protecting the seller’s rights and making all closing arrangements based on conditions
  • Discharging the existing mortgage to remove it from the title
  • Providing documents to the buyer’s lawyer, including the Statement of Adjustments
  • Preparing the final closing documents for the seller to sign
  • Collecting the keys to present to the buyer’s lawyer along with the closing package and final documents
  • Receiving the closing funds
  • Releasing the transfer deed
  • Overseeing payments such as real estate commissions

Learn more about the process of selling your home by reading these posts next: 

How long can you delay closing on a house in Ontario?

How long a buyer can delay on closing a house often depends on the mood and circumstances of the seller. For example, sellers tend to be more inclined to agree to extending the closing date for things such as title discrepancies, liens, or property survey issues to avoid the hassle of relisting. Extensions can be just a few days, several weeks, or, less commonly, over a month as long as both parties are in agreement.

When a buyer can’t close due to issues like financing, the seller might be less agreeable to an extension or request an additional deposit as reassurance. In the worst-case scenario, a seller can take legal action for breach of contract and sue for damages related to the costs of a delayed closing. While buyers won’t face legal penalties for not closing on time, sellers can demand some pretty steep compensation.

What’s the best way to make sure your closing goes off without a hitch? Working with the best real estate team in Toronto, of course. When you work with a top real estate team, you can expect an entire extended team of professionals. Learn more by reading: Your A Team’s A Team: Why it Pays to Work with the Best Real Estate Agents in Toronto.

How many times can a builder delay closing in Ontario?

Builders are required to provide a delayed closing warranty for both condos and freehold homes at the time the purchase agreement is signed. If closing is delayed beyond the Firm Closing Date, builders are generally allowed a grace period based on two delays of 120 days each and must compensate buyers to a maximum of $7,500 when firm closing dates aren’t met.

If you’re in the process of buying or selling a home in Toronto, we’d love to help make the process, fast, easy, and profitable. Get in touch with The Christine Cowern Team today by giving us a call at 416-291-7372 or sending us an email at hello@christinecowern.com.