Closing The Sale
Add a lawyer to your team
When selling, it's essential to have a lawyer handle all the various legal documents that change hands. Before you agree to a lawyer, make sure he or she is experienced in real estate, ask how they structure their fees, and get an estimate of all the legal costs you can expect.
If you don't have a lawyer, some ways to find one are:
Ask the people you trust if they know a lawyer with substantial real estate experience and your Realtor can also give you names of several lawyers.
Your lawyer will review important documents that require your signature. The most critical of these is the "offer" submitted by the buyer. You will be legally committed to anything you sign, so know exactly what you are agreeing to.
Receiving an offer
All of your hard work has paid off, but you won't know exactly how much it's paid off until you see the offer. This is an exciting, often emotional time, so be prepared.
Your REALTOR® will walk you through the process....
You'll see every offer
Your REALTOR® will present you every offer that’s submitted.
The buyer's REALTOR® may be there too
He or she represents the buyer's best interest in the negotiation. The buyer will likely not be there, so you can review and respond to their offer without any awkward pressure
Your eyes will be immediately drawn to the price!
Here's where emotions can really kick in. This isn't a poker match, but remain calm. Your REALTOR® can provide advice before any judgments are made.
Discuss the offer:
You may want to ask your REALTOR® for advice on the merits of the offer. Maybe it's time for a high-five, or maybe it's time to plan your counter offer. You may also wish some private time to discuss things with your partner.
Three options when responding to an offer
- You can accept the offer - You got the price you were hoping for, maybe even more! The closing date looks good and there are no fussy conditions. Sold!
- You can reject the offer - This offer isn't even close.
- You can "sign back" the offer - This offer is close, but something's not quite right. Now the delicate art of negotiation begins, by "signing back".
Reasons why you may want to "sign back"
You want more money
This is by far the most common reason people "sign back". Everybody wants to get the most for their home, and as the saying goes "if you don't ask, you don't get". Go for it, but don't get too greedy and insult someone who has made a fair offer.
You want to change the closing date
Maybe your buyer wants to move in sooner than you'd like. Maybe you haven't even started looking for a new home! You can "sign back" a compromise closing date. Perhaps the buyer will compensate you for the inconvenience of living in a motel for a few weeks.
There may be some undesirable conditions on the offer
Conditions are points of contention that must be fulfilled in order for the sale to go through.
Here are some common ones:
- Buyer to obtain financing: If the buyer doesn't have a mortgage lined up, he or she will often put in this condition. The sale will only go through if the buyer can get the mortgage he or she wants.
- Approval to assume mortgage: You have a great mortgage rate on the property and the buyer only wants your home if he or she can also take over your easy payments.
- Sale of purchaser's home: The buyer hasn't sold their existing home yet and he or she wants to be protected from the expense of owning two properties. You might want to ask their REALTOR® about the other home and its odds of selling soon.
- Property Inspection: This condition is becoming standard practice. Refusing a home inspection before sale is highly suspicious to a buyer, and may spoil the deal.
The Art of Counter-Offers and Negotiation
A successful negotiation is one that leaves both you and the buyer feeling satisfied with the outcome. This is a highly emotional time, so be sure to regularly "check your head", and ask yourself "How important is this particular detail to me? Am I willing to jeopardize a sale over this?" Remember once you "sign back" an offer, you are releasing the buyer from their offer and he or she is free to walk away. Your REALTOR® can help you every step of the way.
Closing the sale
Your negotiations were a success. But before your house is truly sold, it's time for the vital final steps known as "closing". Your REALTOR® and lawyer will take care of the many complicated and time-consuming legal maneuvers. That's why you hired pros.
Canada's money laundering reporting requirements:
By the time you accept an offer, your REALTOR® will also advise you of reporting requirements by FINTRAC, the federal agency responsible for administering Canada's Money Laundering and Terrorist Financing legislation and regulations.Your REALTOR® is required by federal law to complete a client identification form, and must ask you as the vendor or seller for verified ID such as a driver's license or passport. You can find out more on the FINTRAC web site at http://www.fintrac-canafe.gc.ca
You still have plenty to do. Your closing checklist should include:
- Advise your lawyer that an Agreement has been signed. Make sure your lawyer is ready to close the transaction.
- Immediately begin satisfying any conditions of the agreement that require action on your part before the set date of completion creeps up on you.
- Notify your lawyer and lending institution if the buyer is assuming your mortgage.
- Contact the utilities, telephone and cable companies about transferring or removing service. Your lawyer will often handle the transfer of utilities.
- Call your insurance agent and arrange cancellation or transfer of your homeowner's insurance.
- Contact a moving company to arrange your move on or prior to closing date.
- Send out your change of address notices and advise the post office. Notify the Ministry of Transportation about your new address for driver's license and registration.
- Notify your REALTOR® immediately if anything changes about your property or your situation.
Contact with your lawyer
- If you plan to "discharge" or pay off your mortgage with proceeds of the sale, your lawyer will obtain a statement from your lender showing your outstanding balance on the mortgage, and any penalties you'll have to pay to discharge the mortgage.
- A few days before closing, your lawyer will ask you to sign the paperwork that enables the title to be transferred to the buyer.
- On closing day, your lawyer will receive and distribute the proceeds from the sale, pay off your mortgage and other costs, and give you a cheque for the net proceeds.