Closing Date Vs Possession Date in Canada

Buying a house is often a whirlwind of activity and emotions. It can be both exhilarating and stressful to get out and look at homes to decide which one is best for your needs. Once you’ve zeroed in on your top contenders, it’s time for offers and negotiations. When a seller accepts your offer, the hard part is done. Now it’s onto the more practical details of closing the transaction before you finally get your keys. Since much of the process is handled by your lawyer, this part can feel relatively hands-off. It’s still important to be familiar with the terms you’ll encounter. Like the ones involved in this common question we hear: “Is closing date and possession date the same?” It’s questions like this that emphasize the importance of staying informed during this critical stage. In this post, we’ll answer some of your most pressing questions about the closing date vs possession date in Canada.

Want to stay up to date with the latest in Toronto real estate? Get news about our latest listings and insights on the market by subscribing to our newsletter.

What Is a Closing Date?

The closing date is when the ownership of a title legally transfers from the seller to the buyer. There are numerous details to iron out before your new home truly becomes yours.

This period can also be somewhat stressful, and the thought of “what if the sale falls through” will likely cross your mind at some point. Fortunately, these situations are rare. Knowing your responsibilities can help prevent any disruptions or last-minute problems with your transaction.

First, you should work closely with an experienced real estate agent who knows how to prepare a clean and well-written Agreement of Purchase and Sale. This ensures that both the seller and buyer understand their parts.

Secondly, you’ll need a good real estate lawyer to examine all documents and to conduct an extensive title search. The sooner any encumbrances come to light, the more empowered you will be to deal with them. Your lawyer will also arrange for a high-quality title insurance policy to protect your ownership of your home.

Before you take possession, you will also want to arrange a final walkthrough. As the buyer, you have the right to receive the home in the same condition as when you placed your offer. If the current occupants have caused any damage in the meantime, it is their responsibility to make the required repairs.

Do you want to know more about Toronto’s unique real estate market and lifestyle? You’ll gain fun and valuable insight from the posts below:

What Is a Possession Date?

Is the closing date and possession date the same thing? Many people will throw around the terms interchangeably. However, they are two distinct events from a legal perspective. Put simply:

The closing date is when you become the new owner on paper.
The possession date is when you physically get possession of your new home.

Confusion over closing date vs possession date is understandable, because they often happen on the same day. Other times, you won’t get the keys until the next business day or after the weekend or statutory holiday. A slight delay in possession ensures all funds are cleared before you get your keys. This way, you don’t exceed your allotted time with the movers due to unforeseen complications.

Are you on the hunt for your next Toronto home? You may find it by browsing our latest listings.

What Is a Typical Closing Date on a House?

The buyer and seller can negotiate whatever closing date works for both parties. A typical closing date on a house is 60-days, as it gives everyone a chance to get organized and packed and finalize the details. However, being flexible can be advantageous when it comes to negotiations, particularly when the seller urgently needs to move.

We have seen quick closing dates of 30 days. This can happen when a home is vacant and ready to move in. Just be aware that such a short time period can be tight for performing due diligence or obtaining financing.

If either the seller or buyer needs more time, the closing date can extend to 90-days or even beyond.

Whatever your closing date, you can prepare for a seamless transition by performing as many tasks beforehand as possible.

Set up utilities at your new address starting on your closing date.
Arrange for home insurance.
Forward your address with Canada Post.
Schedule a moving company early to ensure availability. If taking possession on closing date, we recommend booking an afternoon slot to ensure you are not waiting due to a delay.

You’ve just found your ideal home. Now what? Decorate it and make it your own, of course! The posts below will fill you with inspiration:

What Happens on Possession Day?

Possession date will be a busy day. The legal and financial details are taken care of. Now the heavy lifting begins.

First and foremost, locate all important systems in your new house, like the water shut-off valve and the breaker box.
Before you unpack, you might want to perform an initial cleaning, especially in the kitchen and bathrooms.
For your security, consider changing the locks or installing a keyless entry system.

You don’t have to be fully unpacked or organized to begin enjoying your new home. In fact, we recommend taking frequent breaks throughout the process. This will help to prevent overwhelm. In addition, it’s the perfect time to explore your new community and say hello to your neighbours.

Understanding the nuances of closing date vs possession date is just one example of the important details of buying or selling real estate that you need a trusted Toronto real estate expert for. Considering buying or selling in Toronto? Our Toronto luxury real estate agents can help you achieve it. Reach out to ana@asantos.ca or call us at 416.575.7317 to begin a conversation.