When you’re making an offer to purchase a property, you’ll be asked when you would like to “close” on your property as part of the agreement to purchase. The date you pick will also have to align with your seller’s expectations as they may need to arrange to move and vacate the property.
On closing day, the ownership of the property is transferred to you, the buyer, and in most provinces, you will receive the keys to your property towards the end of the day.
While typically any business day can be designated as your closing day, it is important to consider a few factors that may make your closing experience easier and avoid potential issues should closing get delayed.
Here are a few of our suggestions when you’re picking your closing date:
Avoid Fridays, if you can
While a Friday might sound like the ideal day of the week to close on a purchase. Friday closings can be the cause of major challenges and extra costs should something not go according to plan.
That’s because mortgage lenders and the electronic land registry are open until 5pm on Friday afternoon. After 5pm, registration and transfers of funds, if needed, become impossible until the following Monday.
During the day of closing a lot goes on behind the scenes and timelines can be very tight. Funds move between the buyer, the buyer’s lender and the seller and their lender (and their respective lawyers). After the funds arrive, the transaction needs to get registered before keys can be released to the buyer.
Needless to say, even the slightest delay or something not going according to plan can mean the difference between meeting the 5pm registration deadline or missing it. If the 5pm deadline for registration is missed for whatever reason, your transaction will likely not close till the next business day, which is Monday.
Depending on your circumstances, such delays can be costly and put a wrench in your moving plans, so if you can potentially avoid a Friday closing date, you may just eliminate a few potential headaches and hassles.
Before a long weekend or holiday
We love our long weekends and while it may seem like the ideal time to close and settle into your new home, a long weekend can present the same challenges of closing on a Friday.
With mortgage lenders and the land registry closed for the long weekend or upcoming holiday, any delays in closing may result in having to wait until the next business day to close.
Month-end, especially in the spring
The volume of Real Estate transactions peak during the months of May through to September.
This means that law firms, movers, appraisers, and many other parties involved in your transaction get particularly busy these months, and particularly on the last few days of the month.
Closing at month-end isn’t an issue. In fact, it’s quite common.
However, with an increased volume of transactions and all the players in the system working to hit month-end deadlines, the chances of something slipping through the cracks will likely increase. It also means you may not always get your first choice of lawyer, mover, etc., especially as covid continue to slow down and change processes in the industry.
When negotiating your closing date, picking a day other than Friday, prior to a long weekend or on a month-end may be a good idea, despite the inconvenience.
While your transaction may close without a hitch, even if on a Friday or the end of the month, picking the right closing date can decrease the chances of having closing issues.
Important note: This article is not Legal Advice. No one should act, or refrain from acting, based solely upon the materials provided on this website, any hypertext links or other general information without first seeking appropriate legal or other professional advice.