The Ontario Home Closing Process Explained

When both sides sign an accepted offer in Ontario, you have a binding contract. But the deal is not done. The buyer still has to pay a deposit, clear any conditions, arrange the money and wait for closing day. The seller has a to-do list too.

The signed contract is called the Agreement of Purchase and Sale, or APS. Everything that follows comes from it, including the closing date. The buyer and seller choose that date in the offer. A longer close gives more time to sell another home or plan a move. A shorter one suits a buyer who is ready now.

This guide walks buyers and sellers through each step, in order, for homes in Mississauga, Oakville, Burlington and Milton. It also shows where deals most often go wrong.

Step 1: The Offer Becomes a Contract

An offer becomes a contract when the seller accepts it and both sides sign. If the seller changes anything, that is a counter-offer. The buyer can accept it, refuse it or counter again. Only the final version both sides sign counts.

Right after signing:

• Save a full copy of the signed APS, with every page and schedule.
• Write down every date and deadline in one place.
• Tell your lawyer and your mortgage lender that you have a deal.
• Avoid big money moves, such as a new car loan. They can affect your mortgage approval.

Step 2: The Deposit

The buyer pays a deposit to show good faith. The APS says when it is due. It is often due on acceptance or within 24 hours, so read your contract.

• It is not extra money. It counts toward the price on closing day.
• It is held in a trust account, usually by the seller’s brokerage, not by the seller.
• It is usually paid by bank draft, certified cheque or wire transfer.
• If it is late, the seller may be able to end the deal.
• If a deal falls apart because a condition was not met, both sides sign a mutual release before the deposit is returned.

Plan ahead. Keep the deposit in an account you can reach quickly, not in investments that take days to sell. Banks can also limit large transfers, so ask about limits before you make an offer.

Step 3: Conditions

A condition means the deal only goes ahead if something happens by a set date. The most common ones are:

• Financing. The buyer’s mortgage must be approved.
• Home inspection. The inspector must find nothing the buyer cannot accept.
• Status certificate review. For condos, the buyer’s lawyer reviews the building’s documents.
• Sale of the buyer’s home. Less common, and many sellers dislike it.
• Lawyer review. The buyer’s lawyer checks the contract.

Conditions usually last a few business days. Before time runs out, the buyer either removes the condition in writing, usually with a waiver or a notice of fulfillment, or ends the deal under the contract’s terms. Talk to your agent and lawyer before you sign anything. Our guide to offer conditions in Ontario goes deeper.

For condo buyers

The status certificate shows the building’s finances, rules, reserve fund and any legal disputes. A building with a weak reserve fund may bill owners extra later. Read the condo status certificate, explained before your lawyer’s review.

For sellers

While conditions are open, your home is “conditional.” Some sellers keep showing it or take back-up offers, if the contract allows. Ask your agent what is allowed, and be ready to send any papers the buyer asks for.

Step 4: Mortgage Approval and the Appraisal

The buyer sends the signed contract to the lender. The lender checks income, savings and credit, and often orders an appraisal, an expert opinion of the home’s value. If the appraisal comes in below the price, the lender may lend less. The buyer must then cover the gap.

• Get a pre-approval before you shop.
• Keep a cash cushion in case of a gap.
• Answer your lender quickly when it asks for papers.
• Keep your job and credit steady until you have the keys.

First-time buyers should also read our summary of first-time home buyer incentives in Ontario.

Step 5: The Home Inspection

An inspector checks what can be seen and tested: roof, structure, heating, plumbing, electrical and more. They cannot see inside walls. If the report finds a problem, the buyer can accept the home as is, ask for a repair, ask for a lower price or credit, or end the deal if the condition allows. Any change must be in writing and signed by both sides. See our home inspection guide.

Sellers: a fair answer to an inspection request often keeps a deal alive. A flat refusal can lose it.

Step 6: The Lawyers Do the Legal Work

In Ontario, the buyer and the seller each have a real estate lawyer. Pick yours early and send them the signed contract right away.

For the buyer, the lawyer:

• Searches the title, to confirm the seller owns the home and can sell it.
• Checks for liens, unpaid taxes, city work orders and other claims.
• Sends the seller’s lawyer any problems to fix by the requisition date, the deadline set in the APS.
• Arranges title insurance, which most lenders require.
• Prepares the transfer and mortgage papers.

A lien is a legal claim against a home for money owed. For example, an unpaid contractor can register one. The seller must clear it before closing.

For the seller, the lawyer pays off the old mortgage, prepares the transfer, clears any title issues and makes sure the sale money arrives, minus what is owed.

Step 7: The Final Funds

The seller’s lawyer prepares a Statement of Adjustments. It splits costs the seller has already paid, such as property tax or a full fuel tank, so each side pays only for its own days. The buyer’s lawyer checks it, then tells you the exact amount to bring. That amount covers the rest of the down payment, the land transfer tax, legal fees and the adjustments, minus your deposit.

Send the funds by bank draft or wire transfer, a few days early if your lawyer asks. Check your bank’s transfer limits ahead of time. Our closing costs guide lists every fee, and the land transfer tax calculator works out the biggest one. Mississauga, Oakville, Burlington and Milton do not charge a city land transfer tax, so you pay only the Ontario tax.