FSBO Guide Section 6: Closing the Deal
If you have not already done so (or even if you have) the buyer may request a professional inspection of the property, to ensure there are no major flaws or problems. If any are found, the buyer may insist repairs be made prior to closing. If you do not agree to the repairs, the deal may fall through. If you do agree, then the buyer will have the right to inspect the property on the closing date to make sure they have been carried out. Consult with your lawyer to see where your obligations lie.
Again, any problems at this stage can be preempted by having a professional inspection done before you put your house on the market.
Once the inspection is complete, the buyer will generally apply for mortgage financing. The mortgage company will often order an appraisal of the property to make sure the buyer is not over-paying, and may even hire a surveyor to verify the property’s boundaries.
The buyer’s lawyer will perform a standard title search on your property to make sure there are no liens or other legal restrictions on your property, beyond what you would have been required by law to disclose. Some restrictions might be benign, such as easements (right of way) for storm drains, or even an access road for a neighbouring property. If the title search does turn up any liens, your lawyer will advise you; you may be required to clear any problems.
Removal of conditions
If any conditions or contingencies were written into the contract, such as the buyer selling his own house before completing the purchase of yours, then they must be removed (waived) by the date specified in the contract for the sale to go through. Otherwise, the contract becomes null and void. It is a good idea to keep in touch with the buyer as these dates approach, to ensure that everything is on track, and make any changes (such as extending the date of the condition, if you are both willing).
Consult with your lawyer on how to proceed, if you do wish to make changes. Any changes or waivers to the conditions must be put in writing.
Once the buyer has been approved for a mortgage, and all existing conditions have been removed and any repairs made, then the sales agreement becomes firm and binding. The closing date will usually fall a month to two months after the contract is signed.
As closing day approaches, you should advise your mortgage company that you intend to pay out the mortgage, and let your utility providers know when to shut off services under your name. Your lawyer will take care of all the details needed to close the deal, such as collecting outstanding money, settling the transfer of taxes, paying any loans or liens, transferring the deed to the new owner, and securing title insurance.
On the day of closing, the buyer will usually perform a personal inspection of the property, to make sure that it is in the same condition as agreed upon in the contract – you are legally obligated to keep the house in materially the same conditions. If any problems or disagreements arise at this point, the money for the sale will be held in trust (escrow) by one of your respective lawyers until the matter is resolved.
If there are no last-minute disputes, then you can hand over the house keys to the new owner. You can expect to receive a cheque for the balance of the funds from the sale within a couple of days of closing.
Congratulations on a successful sale!
Proceed to: FSBO Guide Section 7: List of Resources