When Does The Seller Receive Money From Buyer

The arrival of spring also marks the busiest time of year for the real estate market. Selling your home can be confusing, especially if this is your first time or you're the executor of an estate and need to sell the deceased's home.
One question that sellers want to know is how quickly they will get the money after the sale is completed.

In most cases, the net sale proceeds (after payment of the real estate commission, legal fees, taxes, any mortgage, and so on) will be deposited in your bank account on the next business day. In a few cases, the funds may be available for deposit late on the day of closing but this is not usually possible.
Sometimes, there is a problem on the day of closing and funds are not available right away. For example, if a buyer is not approved for a mortgage and doesn't admit this until the day of closing, the sellers could be left owning the house and without any sale proceeds. That's what happened to one of our Stittsville clients. The buyer was hoping to borrow from family/friends in time but was not successful. On the day of closing, the buyer literally 'walked' away from the deal. Having a deal fall apart on closing day is, fortunately, very unusual. But it can happen.
A much more common situation is that the closing is delayed to another day. This can happen because the buyer doesn't have the funds in time (perhaps the buyer's home was being sold and closing was delayed) or the buyer demands that the seller meet some additional condition and time is needed to meet that condition.
That's what happened to one of our Ottawa clients who was asked to repair damage that did not exist when the Offer was signed. A wind storm a few days before closing uprooted an old oak tree which fell against the house. Although there was only minor damage, the repairs required a few weeks to complete. The buyer refused to close until the repairs were done.
We make every effort to deposit sale proceeds into a client's bank account quickly. However, there is no guarantee that the funds will be there at any particular day or time. Also it is important to know that the funds we receive are not usually certified. As a result, the bank will likely hold the funds for a few days to make sure the cheque clears. You should check your bank's policy regarding a deposit of a large amount of money and under what conditions funds might be held and for how long. If you are selling your home or other real property this spring in the Ottawa area or elsewhere in Ontario, we can help.
Make an appointment to meet with one of our lawyers today. We will walk you through the process and ensure your interests are protected at every step of the way. And we will make sure you get your sale proceeds as quickly as possible!

Reproduction of this blog is permitted if the author is credited. If you have questions or if you would like more information, please call us at 613 836-9915. This blog is not intended to be legal advice but contains general information. Please consult a lawyer or other professional to determine how the information in this blog might apply to you.
Blog posts pre-dated December 1, 2015 were originally published under Neff Law Office Professional Corporation.