Sellers sometimes assume that once they accept an offer, the work is done. In fact, completing a sale involves its own set of legal steps, and a seller's lawyer has real work to do to make sure closing goes smoothly and the seller walks away with the correct net proceeds. Knowing the sequence helps you avoid last-minute problems on closing day.
Discharging the existing mortgage
Most sellers still owe money on a mortgage. Your lawyer requests a mortgage discharge statement from your lender, which sets out the exact amount needed to pay off the loan as of the closing date, including any interest and penalties. On closing, the sale proceeds are used to pay off and discharge the mortgage, so that clear title passes to the buyer. Ordering this statement early matters, because lenders can take time to produce it.
Preparing the closing documents
Your lawyer prepares the transfer of ownership and the other documents needed to complete the sale, and reviews the buyer's documents. Everything has to be in order for the electronic registration of the transfer to proceed.
Statement of adjustments
The statement of adjustments makes sure each side pays only for their own period of ownership. If the seller has prepaid property taxes, condo fees, or certain utilities beyond the closing date, the buyer reimburses the seller for the portion that falls after closing — and vice versa where the seller is behind. These adjustments are calculated to the closing date and can shift the final figure, so they are worth confirming before closing.
Closing day for a seller
On closing, the buyer's lawyer sends the balance of the purchase price. From those funds, your lawyer pays out and discharges your mortgage, pays any other required amounts, and releases the net proceeds to you. Once registration of the transfer is complete, the keys are released to the buyer.
Seller's checklist
- Order your mortgage discharge statement early.
- Confirm the adjustments so the final proceeds are what you expect.
- Make sure you can deliver vacant possession (or the agreed possession) on the closing date.
- Address any last-minute requisitions from the buyer's lawyer promptly.
Takeaway: Order your discharge statement early and confirm the adjustments before closing day, so your net proceeds and the transfer both go through without a hitch.
This article is general information for educational purposes only and is not legal advice. For advice on your situation, book a consultation.