What Happens on Closing Date When You Sell a Home in Ontario?

Key takeaways

• Closing day is usually when ownership passes to the buyer and the sale is registered.
• Your lawyer manages the money: funds in, mortgage paid off, commission and adjustments settled, net proceeds out to you.
• Proceeds and keys are released once the transaction is complete under the closing arrangements — not necessarily first thing in the morning.
• The home should usually be in the agreed condition and empty by closing, unless you’ve agreed otherwise, and the keys are released to the buyer.

What actually happens on closing date?

Closing date is typically the day ownership of your home transfers to the buyer. It’s the date written into your Agreement of Purchase and Sale, and it’s usually when the sale becomes final.

Most of the work happens between the two lawyers, not between you and the buyer. In Ontario, closings are commonly completed electronically, and the lawyers usually operate under an escrow arrangement — often governed by a Document Registration Agreement — rather than literally handing over every signed document in person. Under that arrangement, the funds, keys and off-title documents are handled separately, and your lawyer registers the transfer electronically so the buyer’s name goes on title (the legal record of ownership).

You usually don’t need to be present. If you attended your signing appointment beforehand, you’ve typically already signed everything your lawyer needs. Here’s the general shape of the day, depending on the closing arrangements:

• The buyer’s money is delivered to your lawyer, usually to be held in escrow.
• Your mortgage is paid out from the proceeds. Removing it from title usually happens later.
• The real estate commission and any adjustments are settled.
• The transfer is registered, putting the buyer on title.
• Your net proceeds — what’s left — are released to you.
• The keys are released to the buyer.

Where does the money go?

This is where a common misunderstanding needs clearing up. The statement of adjustments is not where your net proceeds are calculated. It settles the price as between you and the buyer, apportioning shared items such as property taxes as at the closing date. It does not normally show your mortgage payout, the real estate commission, your legal fees and disbursements, or other trust disbursements. Those appear in your lawyer’s trust ledger or funds summary, which is the document that actually shows what came in, what went out and what is left for you. It is usually summarised for you in the reporting letter after closing, and you can ask for it sooner.

When is the sale actually final, and when is my mortgage off title?

Two questions worth separating, because the answers are different.

On completion: Ontario closings are normally done electronically, and funds, keys and paper documents cannot move through the registration system. So the lawyers work under escrow terms, usually in a Document Registration Agreement. Money and documents are released to each other on the understanding that they are held in escrow until registration is completed and each side confirms it. The sale is complete when those escrow conditions have been met and the transfer is registered, not simply when the money lands. Until then the funds are held, not earned. Your net proceeds and the buyer’s keys are released under those same arrangements, which is why nobody can promise you a particular hour of the day.

On the mortgage: being paid out and being discharged are different events. On closing your lawyer sends the payout amount to your lender out of the sale proceeds. Removing the charge from title is a separate registration, and it usually happens afterward — with most institutional lenders, weeks or months afterward, because the lender prepares and registers its own discharge. To bridge the gap, your lawyer normally gives the buyer’s lawyer a written undertaking to obtain and register the discharge, which is a personal professional obligation on your lawyer, and then follows up until it is done. If you are told at closing that your mortgage is “discharged,” what has almost always happened is that it has been paid and the discharge is in progress.

Out of the sale proceeds, your lawyer typically pays:

The mortgage payout is worth flagging. Your lawyer gets a payout figure from your lender, good to your closing date, and sends that amount out of the sale proceeds on closing. Removing the charge from title is a separate registration that usually follows afterward. The figure can include accrued interest, a prepayment charge on a closed mortgage and a discharge fee, so the amount cleared is often a little more than the balance on a routine statement.

Adjustments usually work in both directions. If you prepaid property tax for time past the closing date, the buyer typically reimburses you for their share; if you underpaid, you credit the buyer. Either way it’s generally settled here, on closing.

When do I get my net proceeds?

Your net proceeds — the balance left after everything above is paid — are typically released to you after completion and registration, according to the closing arrangements. The exact timing depends on when the buyer’s funds arrive, the land-registry system, the other side, and the closing deadline, so it isn’t something anyone can promise to a specific hour.

The reason is straightforward: the money and the registration are linked. Your lawyer can usually only release your proceeds after the buyer’s funds have arrived and the transfer has been registered. Registration happens electronically, and there can be a queue, so the exact timing isn’t something anyone can promise to the minute.

To help the money reach you smoothly, your lawyer usually asks for a void cheque or a direct-deposit form ahead of time — a document that shows your banking details so your proceeds can be deposited into your account. No money moves because of that form; it only shows where the funds should go.

A few practical points about the timing:

• Don’t count on the money being available first thing in the morning. Timing depends on the buyer’s funding, the land-registry system and the closing deadline.
• If you’re using your sale proceeds to buy another home the same day, tell your lawyer early — the timing has to be coordinated carefully.
• Ask your lawyer how they’ll send the funds (direct deposit, wire, or bank draft) and when you can realistically expect them.

What do I have to do with the house and keys?

Two things are typically on you as the seller: leave the home in the right state, and get the keys to the buyer.

The home should usually be in the agreed condition and empty by closing, unless you’ve agreed otherwise in your Agreement of Purchase and Sale. “Empty” generally means your belongings and any garbage are gone; “agreed condition” means the property is in the state the contract promised, with the inclusions (like appliances that were part of the deal) still there and any excluded items removed. If you agreed to leave certain things behind, that stays. If you agreed the buyer can take possession with a tenant in place, that governs instead.

For the keys, you don’t usually meet the buyer. Depending on the closing arrangements, the keys — and any garage remotes, mailbox keys, or fobs — are typically released to the buyer once closing is complete, often via a lockbox or through the real estate representative. Handing them over early, before registration and the money are done, is generally a mistake, because the sale usually isn’t final until then.

A short closing-day checklist for the property:

• Move everything out and remove any garbage, unless the contract says otherwise.
• Leave behind anything that was included in the sale.
• Do a final walk-through to confirm the home matches the agreed condition.
• Arrange to release all keys, remotes, and fobs to the buyer through the agreed method (such as a lockbox or your real estate representative), not directly to the buyer before closing is complete.

What is my lawyer doing behind the scenes?

Selling a home in Ontario typically requires a lawyer to complete the closing, and on closing day your lawyer is usually doing the heavy lifting. They generally receive the buyer’s funds (often held in escrow), pay off and discharge your mortgage, settle the commission and adjustments, register the transfer to the buyer, and release your net proceeds. They also typically arrange to register the discharge so your mortgage is formally removed from title.

Your job before the day is usually to give your lawyer everything they need — signed documents, banking details, and details of anything being handed over — so the day can run without you having to intervene. Use your own licensed real estate lawyer for this. They act only for you and help make sure the money and the keys move in the right order.