In this article of the series, we will look at sources of delay resulting from actions of both purchasers and sellers.
1. Unrealistic closing/possession dates
One of the biggest causes of delay arises from choosing a completion date that is too short for the necessary work to be done. It is not realistic to have a real estate transaction close within a week of signing the contract or removing conditions.
Signing the purchase contract is just step one in the process. The contract does not become final until all conditions are waived or removed. It is only then that the lawyers can do their work. Sellers and purchasers need to make sure that they give their lawyers, mortgage brokers and realtors sufficient time to receive instructions, draft all the documents required and meet with you to complete the transaction. We suggest a minimum of three weeks between the last condition removal date and the possession/closing date.
2. Not leaving enough time to meet with your lawyer
The second most common delay for both sellers and purchasers is not leaving sufficient time to meet with your lawyers. This commonly arises when you have scheduled a vacation or will be away working until at or just before the completion date. Documents must be signed in advance of the possession date to allow time for document delivery, submission to Land Titles and funding of the mortgage. You cannot sign the day before closing and expect the deal to close on time.
If you have to be away in the time leading up to the possession date, make sure from the start of the transaction that your lawyer, mortgage broker, and realtor, are aware of your schedule so that arrangements can be made for you to sign in a timely fashion.
If it is not possible to sign before you leave, it may be possible to send documents to you for signing with a lawyer located near you. This can take extra time and will increase your legal costs. Then original signed documents must be returned. Documents must be customized to reflect the change in signing location and requirements. Of course we cannot guarantee that the lawyer you meet with will execute the documents correctly.
Ideally, we suggest scheduling the possession/closing date for a time when you know you will be in town for a long period of time.
Remember communication is key to prevention of delays. If you are in the process of selling or purchasing property and have questions please contact us for assistance.