Buying a home in Ontario: what can go wrong if the closing date falls between Christmas and New Year's?
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- 01Stat holidays close many banks and law offices
- 02Law clerks take vacation, files slow down
- 03Late lender documents slide past the holidays
Everyone is busy with the holidays. Fewer people are buying, and even fewer are at work.
If the money does not land that day, you wait for the next business day.
On a recent closing, the lawyer and seller ran out of time to prep and sign, so it slid two to three days. Over Christmas, that stretches.
Both sides have to agree. Usually a signed amendment, or both lawyers agreeing in writing. Ask your lawyer which applies, and ask early.
- 01At the offer, move any holiday closing date
- 023 weeks out: confirm funding, send down payment
- 032 weeks out: book your signing appointment
- 041 to 2 weeks out: movers, locks, utilities
- 05Date change? Both lawyers confirm in writing
Tell Yifei your date, where your mortgage and down payment stand, and who is away. He will tell you straight what to do.
Ask YifeiThe stretch between Christmas and New Year's is when statutory holidays and time off for lawyers, banks and movers all pile up. If funds don't move, documents don't get signed or the lender doesn't release the mortgage, closing gets pushed, and a delay that runs into the holidays can keep you from your keys for several days. If you can, close in mid-December or after the second week of January. If you can't, have signing, down payment and mortgage ready two to three weeks early.
Why these days go wrong
On closing day in Ontario, several parties have to finish on the same day: your lawyer collects the down payment and mortgage funds, sends the money to the seller's lawyer, registers the transfer, the seller's lawyer confirms receipt, and only then are the keys released. If any link is slow, you don't get keys.
Between Christmas and New Year's, every one of those parties is short-handed:
- December 25, December 26 and January 1 are public holidays in Ontario, and many banks and law offices are closed. When one falls on a weekend, the day off may shift. Ask your lawyer which days work.
- Many law office staff take vacation. When the clerk handling your file is away, things slow down.
- Lenders need documents days ahead. Everyone is rushing before the holidays, so anything late slides past them.
- Movers, cleaners and contractors are hardest to book and most expensive that week.
In Yifei's experience, the slowest month of the year runs from December 20 to January 20. Fewer people are buying, and fewer are at work.
How risky is your date?
Also try not to close on a Friday or the day before a holiday. If the money doesn't land that day, you wait until the next business day.
What to do
- Look at the calendar when you sign the offer. If closing lands in the holidays, negotiate a different date right then.
- Three weeks before: confirm the funding date with your mortgage broker and send your down payment to your lawyer's trust account early.
- Two weeks before: book your signing appointment. If you're out of town or overseas, ask how remote signing works and whether you need a notary.
- One to two weeks before: book movers, a locksmith, and transfers for hydro, gas and internet.
- If the date has to change over the holidays, put it in writing and have both lawyers confirm it. Do not rely on a phone call between agents.
What Yifei has seen
On a recent deal the buyers wanted an earlier closing, but their down payment had to sit in the account for a while before it counted, which meant waiting until month end. Yifei negotiated a closing about a week before Christmas: the down payment was ready, and it beat the holidays.
Another closed a few days before Christmas. When the talk turned to hiring trades after closing, Yifei's point was that even booking right then, work wouldn't start for two or three weeks, and with the holidays in between it would really begin in January.
And delays happen in ordinary months too. On another recent closing, there wasn't enough time for the lawyer to prepare documents and for the seller to sign, so Yifei expected a two to three day delay. On another, when the other agent hinted at an extension, the lawyer told Yifei to stop discussing it agent to agent and have the other lawyer raise it formally. Two or three days is nothing in a normal month. Over Christmas it can turn into more than a week.
Ask about your own situation
Your closing date, your mortgage and down payment, and who's away over the holidays decide whether to change the date. Tell me about your situation and I'll tell you straight what to do. Yifei (RE/MAX), efay.ai.
Frequently asked questions
My closing is already set for December 30. Can I change it?
Yes, if both buyer and seller agree, and it has to be in writing: usually a signed amendment, or both lawyers agreeing in writing to extend. Ask your lawyer which applies. The earlier you ask, the easier it is.
When does the seller get the money?
On Yifei's deals, the seller's lawyer usually sends the proceeds the same day or by the next morning. Over the holidays, with banks closed, it may wait until the first business day after. If the seller is a non-resident for tax purposes, the buyer's lawyer usually holds back part of the proceeds (often 25%, more for some properties) until the CRA certificate of compliance comes through. Ask your lawyer and accountant how much applies to you.
Sources
- Ontario public holidays: https://www.ontario.ca/document/your-guide-employment-standards-act-0/public-holidays
- Non-residents selling Canadian property: https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/information-been-moved/disposing-acquiring-certain-canadian-property.html