We've Sold Our Home! Now What?
You have just concluded the negotiation and accepted the offer for the sale of your home, That’s terrific, but now what? While there may be a number of conditions included in the offer that need to be satisfied before the deal is really, really "final" it isn't too early to start thinking about the matters that must be taken care of between now and the day that your house keys are handed to the Buyers.
As you can well imagine all the work is not done yet. With a little attention to detail and with a little help from a number of friendly professionals, most importantly your REALTOR®, your sale should be positive experience.
Hopefully, you fully understood all your rights and obligations found in the Contract of Purchase and Sale before you signed it. If you aren’t quite sure about something now is not the time to be bashful. Contact your legal professional as soon as possible to clear up any uncertainties that you may have. It is crucial that you deal with these issues now and not at 4:28 p.m. on the Friday of a long week-end possession date.
For example, you want to be certain about which items are included with the sale and which ones you are taking with you when you move out. The normal rule of thumb is that items which are attached to the property or are considered a permanent part of the property (fixtures) are included in the sale. Moveable items (chattels) will normally leave with you. The Contract of Purchase and Sale should have detailed any exceptions to these guidelines. If you have any uncertainty in your own mind, deal with them well in advance of the possession date to avoid unpleasant confrontations with the new owners. Small Claims Court is the last place you want to resolve a dispute over a planter box.
Even if you think you understand all the details of your sale, it will still be extremely helpful for you and your legal professional to meet as soon as possible. You will be of great assistance to your legal professional if you collect all of your important documents and deliver them to his or her office in a timely manner. Papers such as closing documents from when you purchased the home: the lawyer’s final report with the survey certificate and sketch (which you would have received after the purchase of your existing home was completed); tax bills and your Title Certificate. Make sure you have your lawyer explain to you all of the closing costs, including legal fees and disbursements. If you aren’t sure, ask again. You should leave the office after your first visit and have a reasonably good idea of what the final net proceeds from the sale of your home will be.
Although there are many important issues, two of the more important ones are the discharge of any existing mortgage and the property tax adjustment. In normal circumstances any existing mortgage on your property must be discharged from the proceeds of the sale. Do you know how much the mortgage payout penalty will be? Have you clarified with the bank when your last mortgage payment will be?
As for property taxes, make sure you understand the adjustment of cash payable by the Buyers to you on possession. Will you be paying the property tax bill and receiving credit on the sale, or vice versa? Although the amount will be adjusted between you and the Buyer, make sure you are aware of who is actually making the payment so that you aren’t financially embarrassed on closing.
Make sure your insurance agent understands fully your particular situation so that you do not have a gap in coverage. If your house is going to remain vacant for an extended period of time between the time you move out and the time the Buyers take legal possession you must advise your insurer. Your insurance company will expect you to obtain a vacancy permit and/or have you arrange for the inspection of the premises on a regular basis. Remember, according to the Contract of Purchase and Sale, you will be responsible to deliver the home to the Buyer in the same condition as they saw it when they made the offer. Any damage occurring between the contract and possession dates will be your responsibility. You should take care to avoid any loss of coverage under the terms of your insurance policy.
Other loose ends
There are numerous details to attend to before you move out. Try to remember to take meter readings of all utilities on possession date and advise the service providers. Contact other services such as telephone and cable television to cancel service in order to ensure that you are not charged beyond the date of possession. Remember that all of these notifications (including house insurance) will be impacted by any last-minute changes in possession date. As a result, you may wish to anticipate any slight variations in the actual possession date when you initiate all notices and arrangements.
Handing over the keys
Possession date is a time of much excitement, hustle and bustle. It is in your best interest to confirm in writing any agreed changes in possession date in order to deal with all of the notifications just discussed. As a courtesy to the Buyer, try to identify a specific time of day when they will be able to move in. Although you may not be accustomed to being in the retail business, the Buyer is indeed your customer. There is value in having the Buyers relate to you as satisfied customers. The alternative can come back to haunt you.
Try to take care when you move out of the house. Any significant damage caused in the process of your moving out will be your responsibility to rectify. While your family moving crew may only have cost you a few beverages to hire they are not normally bonded for the cost of repairs.
When will I get my money?
This is an important question that you need to clarify with your legal professional. The nature of the land titles system is such that you will be unable to access your funds between the date of possession and the date that the title clears the Land Titles Office. While computerization has greatly sped up this process in the last several years there can still be a significant waiting period, particularly during the summer season.
The Contract of Purchase and Sale provides that you will receive a payment of interest from the Buyer on your sale proceeds between possession date and the date when your legal professional is authorized to release those proceeds to you. In the meantime, if you need the money (for example for the purchase of another home) then you may need to arrange "bridge" financing with your financial institution while you await the release of your money.
If you have questions, do not be afraid to ask your REALTOR® . Your REALTOR®, legal professional, financial advisor, banker and Insurance agent should all be more than pleased to address any concerns or questions you may have.
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