The Offer Is Accepted, Now What?
You’ve just accepted an offer on your home and the excitement is palpable! But what’s next? When an offer is accepted, it kicks off a structured series of steps that lead to the official closing day.
These steps include meeting conditions, completing due diligence and navigating financial obligations, all within the framework of local real estate regulations. Here’s what you can expect after the offer is accepted and what’s required to reach the finish line of your home sale.
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Understanding the Agreement of Purchase and Sale (APS)
In Ontario, the Agreement of Purchase and Sale (APS) is a legally binding document that outlines the terms of the transaction between the buyer and the seller. Once both parties sign it, the APS formalizes the sale and commits both parties to fulfill specific obligations.
Key components of the APS include the sale price, deposit amount, closing date, and any conditions that may be included. Once accepted, both the buyer and seller must act in good faith to honour the agreement and breaking the contract without just cause can lead to legal repercussions.
Conditional Offers and Their Impact
If the accepted offer includes conditions, such as financing or an inspection, it’s considered a conditional sale. These conditions protect the buyer by providing a timeframe to complete specific actions before the sale is finalized. Let’s explore some of the most common conditions and how they impact the timeline:
Financing Condition
Buyers often require financing approval to complete the purchase. In Ontario, they typically have three to five business days to confirm that their mortgage lender approves the financing for the home. If they cannot secure financing within the timeframe, they may withdraw from the agreement without penalties. During this time, the seller must wait before proceeding with another offer as the buyer’s rights take precedence until the condition is either waived or fulfilled.
Home Inspection Condition
Most buyers will request a home inspection to confirm that the property is in good condition. This is an essential step that allows them to identify any potential issues with the home’s structure, systems or components. If the inspection reveals concerns, the buyer can either renegotiate terms, request repairs or walk away from the deal. In competitive markets, some buyers might waive the inspection condition but this decision can add risk if significant issues are later discovered.
Status Certificate Condition for Condos
For condo sales, a status certificate is crucial. This document provides insight into the financial health of the condo corporation, potential upcoming repairs and any legal matters affecting the unit. Buyers often have up to five business days to review this document with their lawyer. If any red flags arise they may back out of the deal. The status certificate is especially important in Ontario’s condo market, where regulations are designed to protect buyers’ interests in shared ownership settings.
Once all conditions are met and the buyer is satisfied, they will waive or fulfill them, moving the sale to the next stage. At this point, the sale is now considered firm and binding.
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Preparing for Closing: Legal and Financial Considerations
Once the offer is firm, the preparation for closing begins. Closing day is when ownership officially transfers from the seller to the buyer but several steps and costs are involved before reaching this milestone.
Reviewing Closing Costs
For sellers, closing costs can add up. Here’s a breakdown of some of the fees you can expect:
- Real Estate Agent Commissions: Typically the seller pays both the listing and buyer agent commissions which is often a percentage of the sale price. In Ontario, these fees are negotiable but should be specified in your listing agreement.
- Legal Fees: A real estate lawyer is required to handle the closing paperwork and ensure all documents are in order. Legal fees vary but sellers should budget for around $1,000–$2,000.
- Adjustments for Property Taxes and Utilities: If you’ve pre-paid property taxes or utility fees, the buyer will reimburse you for the portion covering the period after closing. Your lawyer will handle these adjustments as part of the final closing statement.
- Mortgage Discharge Fees: If you have an outstanding mortgage, your lender may charge a fee to discharge it upon the sale of the property. Additionally, if you’re ending a mortgage term early, there may be penalties depending on your lender’s terms.
- Capital Gains Tax (if applicable): This applies if the property is not your primary residence and it’s calculated on the profit made from the sale. Consulting with an accountant will help clarify any tax liabilities.
Completing Seller Obligations
On or before closing day, sellers must ensure the property is in the agreed-upon condition. This often includes making necessary repairs if agreed upon during negotiations. Sellers are also expected to remove all personal belongings and leave the home in a “broom-swept” condition, meaning that the property should be generally clean and ready for the new owners.
Signing Closing Documents
A few days before closing you’ll meet with your lawyer to review and sign final documents. This includes the deed of transfer, which officially transfers ownership of the property to the buyer. Your lawyer will also work with the buyer’s legal team to confirm the transfer of funds, pay any outstanding fees and handle the mortgage discharge with your lender.
Closing Day: The Final Handoff
On closing day the buyer’s lender transfers the funds to your lawyer’s trust account and the buyer’s lawyer registers the property in the buyer’s name. Once everything is verified, your lawyer will confirm the transfer and release the keys to the buyer. At this point, the sale is officially complete and you’ll receive the proceeds from the sale, minus closing costs and any outstanding mortgage balance.
While most closings go smoothly, unexpected issues can arise. For example, a delay in funding could push closing to the next business day or a last-minute discovery might require quick resolution. In Ontario, delays of a day or two are not uncommon and real estate contracts often include a provision allowing for a short extension without penalties.
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What if a Problem Arises Before Closing?
Occasionally issues arise that threaten to delay or even derail the closing. Common problems include:
- Funding Delays: Buyers might face unexpected delays in receiving their mortgage funds. In these cases, both parties can agree to extend the closing date by a day or two provided it’s allowed within the APS.
- Property Damage: If the property incurs damage before closing, the seller may be responsible for repairs or compensation. Real estate insurance is advisable to cover any unexpected property damage before the sale is completed.
If a significant problem arises that can’t be resolved, both parties may need to negotiate an alternate solution often with their legal representatives involved.
Wrapping Up the Sale
Selling a home is both exciting and complex. Understanding the post-offer process in Ontario helps you feel more confident as you work through the final steps of the transaction. At RE/MAX Hallmark Pilon Group, we ensure that you’re fully prepared and well-informed throughout every stage. From navigating conditional offers to coordinating closing day details, our expertise is your advantage in achieving a seamless sale.
For additional information or to discuss your specific selling needs, feel free to reach out! We’re here to make the process smooth, stress-free and ultimately successful. As always, our advice is FREE with no obligation to list your home.
Want to learn more? Reach out to us today to schedule your free, no-obligation meeting! Call 613.909.8100 or email Info@PilonGroup.com.
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