You’ve found the perfect home. The offer was accepted. The inspection is done. The mortgage is approved. Now there’s one date circled on the calendar: closing day.
For many people, closing day is a mystery. You sign some papers, hand over a cheque, and somehow you end up with the keys. But behind the scenes, your lawyer and the seller’s lawyer are managing a detailed sequence of legal, financial, and administrative steps. Understanding that process can help you avoid surprises and make closing day a lot less stressful.
I’ve handled hundreds of real estate closings in Peterborough, the Kawarthas, and across Ontario. Here’s what actually happens.
Before Closing Day: What Your Lawyer Has Been Doing
Your lawyer doesn’t wait until closing day to start working. In the weeks leading up to your closing date, they’ve been conducting a title search to confirm that the seller actually owns the property and that there are no unexpected liens, mortgages, or claims against it.
They’ve reviewed the Agreement of Purchase and Sale and all amendments. They’ve communicated with your mortgage lender to arrange the funds. They’ve prepared the transfer documents. And they’ve reviewed the survey or title insurance requirements.
A few days before closing, you’ll visit your lawyer’s office for a pre-closing appointment. This is where you sign most of the documents, review the statement of adjustments and Trust Reconciliation Statement, and arrange for the funds to be transferred. Your lawyer will explain every document and answer your questions. Don’t be shy about asking.
Before closing, you’ll also need to arrange home insurance to reflect the new ownership and provide an Insurance Binder Letter to your lawyer. You’ll need to transfer utilities into your name as of the closing date.
The Statement of Adjustments
The statement of adjustments is the financial summary of your transaction. It shows the purchase price, your deposit, and any adjustments between you and the seller. Adjustments typically include property taxes prorated to the closing date, propane or oil on hand, and common expenses for a condominium.
For example, if the seller has already paid property taxes for the full year and you’re closing in June, you’ll owe the seller a credit for the portion of taxes covering July through December. Conversely, if the seller hasn’t paid taxes, you’ll receive a credit.
The statement of adjustments tells you the balance of the purchase price after adjustments.
The Trust Reconciliation Statement
The Trust Reconciliation Statement breaks down all of the money received by the lawyer into their trust account and disbursed on your behalf. The funds received in trust cover the mortgage advance and the amount you need to bring to closing for your down payment, legal fees, and disbursements. This amount is due at the time of your pre-closing appointment, in the form of a bank draft. The disbursements cover the balance due on closing to the seller’s lawyer, legal fees, and registration costs.
The Final Walkthrough
Most Agreements of Purchase and Sale in Ontario include a clause that allows the buyer to visit the property within 24 hours of closing. This is your final walkthrough, and it’s important.
The purpose is to confirm that the property is in the condition you expected. You’re checking that agreed-upon repairs have been completed, that fixtures and chattels listed in the agreement are still present (appliances, light fixtures, window coverings), and that the seller has vacated. You’re also looking for any new damage that may have occurred since the inspection.
A final walkthrough isn’t a second inspection. You’re not hiring a home inspector. You’re simply walking through the property with your eyes open. If you find a serious problem, call your lawyer immediately. They can advise you on your options before the transaction closes.
What Happens on Closing Day
On the closing day itself, most of the action takes place between the lawyers. Here’s the sequence.
First, your lawyer receives the mortgage funds from your lender. This is called the “mortgage advance.” For most residential transactions, the funds are transferred electronically.
Next, your lawyer and the seller’s lawyer exchange documents. The funds for the balance due on closing are certified and either delivered to the seller’s lawyer (if local) or deposited into their trust account. Once the seller’s lawyer has received the funds, they will electronically register the Transfer through Ontario’s Teraview system. Teraview is the electronic registration system used for all land transactions in Ontario. The transfer of title, the new mortgage, and the discharge of the seller’s old mortgage are all registered through this system.
Once the Transfer and Mortgage are registered and your lawyer is satisfied that the title is clear, the transaction is considered “closed.” The seller’s lawyer then releases the funds to the seller. Those funds first pay off the seller’s existing mortgage, their legal fees, and any other obligations. The balance goes to the seller.
Once the deal has closed, your lawyer will give notice to the municipality of the change of ownership. The property is now legally yours.
When Do You Get the Keys?
This is the question everyone asks. The honest answer: it depends.
In a typical Ontario real estate closing, you receive the keys once your lawyer confirms that the title has been transferred, the funds have been received by the seller’s lawyer, and the transaction has been registered. This usually happens by mid-afternoon, but it can take longer.
Delays are common. A lender may be slow to advance funds. The lawyer may be closing another transaction that needs to be completed first (this is called a “chain” closing). On busy closing days, especially at the end of the month, the process can stretch into the late afternoon.
My advice: don’t book the moving truck for 9:00 a.m. on closing day. Plan for a mid-to-late afternoon pickup. Your lawyer will call you as soon as the keys are ready.
Land Transfer Tax
In Ontario, buyers pay a provincial land transfer tax on closing. The tax is calculated on a sliding scale based on the purchase price. For a home purchased at $500,000, the provincial land transfer tax is approximately $6,475.
If you’re a first-time homebuyer, you may be eligible for a refund of up to $4,000 of the provincial land transfer tax. To qualify, you must be at least 18 years old, a Canadian citizen or permanent resident, and you must not have owned a home anywhere in the world before. Your spouse must also meet these criteria if also on title. If you are a first-time homebuyer and your spouse has previously owned a property, they must have sold it prior to your marriage in order for you to receive up to a $2,000 rebate (provided you are both taking title as 50/50 owners).
There is no municipal land transfer tax in Peterborough or the Kawarthas (including cottage and recreational properties). Toronto has its own additional municipal land transfer tax, but that does not apply outside the city.
Your lawyer will calculate the land transfer tax and include it in your statement of account for the registration costs. You don’t need to file anything separately.
Title Insurance
Most lenders require title insurance as a condition of the mortgage. Title insurance protects you and your lender against problems with the title that weren’t discovered during the title search. This includes survey issues, encroachments, zoning violations, fraud, and errors in public records.
Title insurance is a one-time premium paid at closing. Your lawyer will arrange the policy on your behalf. Our Real Estate Law FAQ has more on title searches and title insurance for Ontario buyers.
Common Problems on Closing Day
The Seller Hasn’t Moved Out
This happens more often than you might think. If you arrive for your final walkthrough and the seller does not appear to have vacated, or you find issues that weren’t there before, call your lawyer immediately. The lawyers may negotiate a short holdback: a portion of the purchase price is held in trust until the seller vacates or the issues are resolved. If the seller refuses to leave, your lawyer can advise you on your legal options.
Mortgage Funds Are Delayed
Lenders occasionally delay the advance of funds, especially if there are outstanding conditions or if the closing falls on a high-volume day. Your lawyer will follow up with the lender, but there’s sometimes a wait. This is one reason why having an experienced real estate lawyer matters. They know how to move the process forward.
Something Was Removed From the Property
If a chattel that was listed as included in the agreement is gone when you do your walkthrough, tell your lawyer before closing. A holdback can be arranged to cover the cost of replacement. After closing, your leverage is much weaker.
Chain Closing Delays
You may be part of a chain of real estate closings. For example, the buyers of your home need to sell their current home first, and so do the people you are buying from. If any link in the chain has a problem, every closing in the sequence will be delayed. Your lawyer will keep you informed, but patience is sometimes required.
After Closing Day
Once the transaction is registered and the keys are in your hand, a few things remain. Your lawyer will send you a reporting letter that summarises the transaction and includes copies of all the registered documents. Keep this letter in a safe place. If you purchased title insurance, keep the policy with your closing documents.
And if you haven’t already done so, this is a good time to think about a will and powers of attorney. You now own a significant asset. Make sure it’s protected. Our Wills and Estate Planning FAQ is a good place to start. If you’ve purchased a cottage or waterfront property, our free Recreational Property Guide covers the unique legal considerations that come with owning property in the Kawarthas.
We’re Here to Help
If you’re buying or selling property in Peterborough, the Kawarthas, or anywhere in Ontario, we’re happy to help. Our firm has been handling real estate closings since 1988. We know the process, we know the local market, and we make sure you’re informed and protected at every step.
Give us a call at 705-749-0628 or book a consultation online.
Barry W. Bussey is the principal lawyer at Bussey Ainsworth in Peterborough, Ontario. He assists clients across the Kawarthas with real estate, wills, and estate planning.
This article is for general information only and does not constitute legal advice. Every real estate transaction is unique. Please consult with a lawyer before making decisions about buying or selling property.
