What to Consider When Choosing the Completion Date for Your Home Purchase
There are many considerations when going through the home buying process. One of those considerations is to decide what day you would like to take possession, referred to in the real estate world as the completion date. It sounds simple however there can be some obstacles.
Be sure to find out in advance whether the Seller has a specific date in mind. Sometimes the date is in stone for the Seller, if they have bought and need to align the sale of their home with the completion date of the house they bought, they may be less flexible. Some people have put their homes up for sale months in advance hoping for a longer completion date. Be sure to find this out in advance. Sometimes the completion date can be more difficult to negotiate than the sale price, it’s not always just about the money.
It sounds like it makes sense to make the completion date on a Friday, once you receive word from your lawyer, you move in and have the weekend to spend unpacking. Well, in Dufferin County and more specifically in Ontario, the Land Registry System operates Monday to Friday and shuts down at 5:00PM. You must be registered as the new owner of the property in order to take possession. If registration isn’t completed before the system shuts down for the day, you may have to wait until the following business day, delaying your completion day. If this were to occur on Friday, you would have to wait until Monday after the weekend. It’s best to complete transactions Monday – Thursday as opposed to Friday to avoid any complications with regard to delays. Fridays are also generally the busiest day in a law firm.
In Ontario, our Agreement of Purchase and Sale states that the agreement will be completed no later than 6:00PM on the day of closing. That doesn’t mean that you have until 6:00PM to vacate, what it means is the transaction could be completed any time leading up to 6:00PM. It could close earlier; it’s dependent on the time of registration explained above. In most cases, the deal is registered mid-afternoon. Once the registration is complete, the keys are turned over to the buyer by the lawyer, the new owner can move in. For this reason, it’s best that the seller plan on vacating the property by mid-afternoon, this will avoid conflict between the two parties. Everyone’s emotions are high on moving day; you don’t want the new owners being parked outside waiting to get in while you’re still moving out. Plan ahead!
This brings us to the subject of bridge financing. It’s advisable to speak to your lender about the option of bridging financing for a couple of days. There is a cost for this but it far outweighs the inconvenience of any issues that may arise on completion day. Bridge financing covers the gap between the closing dates, should you move in to your newly purchased home before you move out of your current home. In other-words, the financial institution lends you the funds for the period of time in between, even 2 days can alleviate some of the stress associated with moving day.
It’s a good idea to visit your newly purchased Orangeville home a couple days prior to taking possession. This allows you to ensure that the seller is on schedule with the move and cleaning. The house is supposed to be turned over to the buyer in broom swept condition. If it’s discovered that this isn’t the case, your realtor can reach out to the selling agent and or the lawyer to ensure your concerns are addressed.
As a buyer we know you’re excited to get the keys to your new home but you may want to consider, if at all possible, not moving in until the day after you take possession. Should the transaction take until late in the day to close, you may find yourself moving in the dark. If you have movers hired, you could end up paying extra in the event of a long day or delayed closing.