From accepted offer to closing day

The offer is accepted. Everyone is pleased. And then there is a stretch of weeks where, from the buyer’s side, it can feel like nothing is happening and nobody is telling you anything.

Plenty is happening. Here is the sequence, roughly in order, and where the genuine risks sit.

The conditional period

Most offers are conditional on something, and this window is usually short. Five business days is common in a competitive market, longer in a calmer one. Everything in this section has to happen inside it.

Financing condition. Your lender reviews the property, not just you. Even with a pre-approval, the lender now has a specific address and needs to be satisfied with it. They may order an appraisal. On a condominium they will want the status certificate.

This is the point at which a pre-approval becomes an approval, and the two are genuinely different. The pre-approval assessed you. This assesses the deal.

Home inspection. Not required by the lender in most cases, and worth doing anyway. If it turns up something structural, you are far better knowing now, while you still have a way out.

Status certificate review, on a condominium. Your lawyer reads the corporation’s finances: the reserve fund, the budget, any special assessment, any litigation. A corporation in poor shape can make a lender decline a unit they would otherwise have funded, and that has nothing to do with you.

Waiving conditions. Once satisfied, you sign a waiver and the deal becomes firm. Your deposit is now genuinely at risk if you fail to close, which is the point at which people start taking the remaining steps seriously.

A word on waiving the financing condition to win a bidding war. It is common and it is a real risk. If the property appraises below what you agreed to pay, the lender funds against the appraisal and you cover the gap in cash. Without a financing condition you have no way out.

The appraisal

The lender wants an independent opinion of what the property is worth, because it lends against appraised value rather than the price you agreed.

Usually this is uneventful. When it is not, the gap is yours to fund. If a home appraises below the purchase price, the lender reduces the mortgage accordingly and the shortfall comes out of your pocket on top of the down payment.

This is more common than people expect in two situations: after a competitive bidding process, and on new construction bought years before completion. There are usually options, including a second opinion, a different lender, or restructuring the down payment. All of them need time, which is why finding out late is the real problem.

Your lawyer

Engage one early. The week before closing is too late to start looking, and good ones get busy.

Your lawyer will search the title, arrange title insurance, prepare the documents, calculate the adjustments, receive the mortgage funds and register the transfer.

Two things to raise with them at the start rather than the end. Tell them if you are a first-time buyer, because they claim the land transfer tax rebates at closing and you do not want that discovered late. And ask for the full cash figure you will need on closing day, including the adjustments, so there are no surprises.

The lender’s final conditions

Your approval will come with conditions attached, and the file does not fund until every one is satisfied. Typically that means updated pay documents, confirmation of the down payment and its source, proof of home insurance effective the closing date, and lawyer details.

The one that catches people is home insurance. You need a policy in force on closing day, and the lender needs written confirmation. On an older property, or one with knob and tube wiring, insurance can be harder to arrange than anyone expects. Start it early. A lender cannot fund without it, and this stops closings.

Signing with your lawyer

Usually a week or so before closing. You sign the mortgage and the transfer documents, provide identification, and deliver the balance of your down payment and closing costs, normally by certified funds or wire.

Arrange that money in advance. Transfers between institutions take longer than people assume, and this is not a deadline with any flexibility in it.

Closing day

Your lender sends the funds to your lawyer. Your lawyer sends them to the seller’s lawyer. Registration happens. Keys are released.

It usually completes during the afternoon, and it can be later than you would like. Do not book movers for first thing in the morning, and do not plan anything that cannot be moved.

Where deals actually go wrong

Nearly all of it falls into a few categories, and every one is avoidable.

• New debt between approval and closing. Financing a car, furniture on credit, a new card for the appliance discount. Lenders re-check credit before funding. This changes your ratios and it has cost people their closing.
• A job change. Even a promotion, if it shifts you from salary to commission or starts a probation period. Tell us before you accept it, not after.
• Moving the down payment around. Lenders trace the funds. Shuffling money between accounts in the final weeks creates questions that take time to answer. Leave it where it is.
• A low appraisal. Covered above. The earlier it surfaces, the more options exist.
• Insurance that cannot be arranged. Start it during the conditional period.
• Waiting too long to engage a lawyer. Everything downstream compresses.

The short version

Between firm and closing, the useful advice is almost boring: change nothing, buy nothing on credit, move no money, and answer document requests the day they arrive rather than the day after.

If something does change, tell us immediately. Almost every problem in this window is solvable with time and very few are solvable in the final week. If you would rather have someone watching the file for you, that is what we do.