Real Estate Closing Process for a Sale Transaction

When someone decides to sell their house they usually reach out to a realtor. Some sellers do not use a real estate agent and instead they list their house on MLS directory. Once they have a firm offer from a buyer, a contract called agreement of purchase and sale (APS) is drafted.

The agreement of purchase and sale is signed by the buyer and the seller once both parties have agreed to terms. A deposit is submitted by the buyer. Buyer can deposit that sum into the account of seller’s lawyer or seller’s agent or buyer’s agent. Seller reaches out to their lawyer with the APS and their real estate law firm starts working on it.

Their law firm will request documents from the seller and start working on their file. Lawyer request their IDs for identity verification at the time of signing. Their property tax bill and condo fee invoice are usually requested to prepare the statement of adjustments. Law firms also inquire about seller’s Family Law Act statement to prepare the transfer on the government registry. Family Law Act statement is also needed to confirm if a spousal consent is needed.

Statement of Adjustments

The Statement of Adjustments is a document that allows both the Buyer and the Seller to see how property taxes, condo fees, deposits and other items are used to determine the actual amount that the Buyer owes the Seller to complete the purchase.

Statement of Adjustments is prepared by the seller’s lawyer. Seller’s lawyer forwards that to buyer’s lawyer. Funds are deposited as per the statement of adjustments and letter of requisitions.

Title Search, Letter of Requisitions and Response to Requisitions

Title search is conducted by buyer’s real estate lawyer on the subject property. They have to perform it before the date mentioned on the agreement of purchase and sale. A title search is used for many purposes, as it includes the names of the property owner(s), restrictions on the land, mortgage details, lease details and other relevant information associated with the property.

If there are any deficiencies in the title of the property, buyer’s solicitor can requisition them. They prepare a letter of requisitions and forward it to the seller’s real estate lawyer.

Requisitions are reviewed by seller’s solicitor and then they submit their response to buyer’s solicitor. Requisitions can be denied if they are received after the requisition date. In the response, seller’s lawyer advises the buyer’s lawyer that they will do the needful to provide a clean title on closing. Seller’s lawyer also reaches out to the concerned parties to remove the deficiencies prior to the closing.